On March 28, 2019, Hestia and Permit issued a press release and delivered their notice of
nomination to the Board which informed the Company, among other things, of their intent to nominate Don C. Bell III, Christopher P. Carvalho, Lizabeth Dunn and Mr. Wolf for election to the Board at the Companys 2019 annual meeting of
stockholders.
On March 29, 2019, the Company entered into a cooperation agreement with Hestia, Permit, Permit Capital, LLC, Permit Capital GP,
L.P., John C. Broderick, Hestia Capital Management, LLC and Mr. Wolf (the Cooperation Agreement), pursuant to which the Company agreed to appoint a new independent director from among the group of candidates identified by Hestia and
Permit within 30 days and nominate an additional independent director nominee selected by the Board, following reasonable consultation with Hestia and Permit, for election as a director at the Companys 2019 annual meeting of the stockholders,
or appoint such individual prior to the 2019 annual meeting. In addition, Hestia and Permit agreed to irrevocably withdraw their nomination notice submitted to the Company on March 28th, and
Hestia, Permit and their respective affiliates agreed to customary standstill restrictions expiring on March 12, 2020 and to vote their shares of the Companys voting securities in favor of each director nominee recommended by the Board at
the 2019 annual meeting of stockholders.
On April 19, 2019, the Company appointed Ms. Dunn and Raul Fernandez to the Board in accordance
with the Cooperation Agreement.
On June 11, 2019, the Company commenced a modified Dutch auction tender offer for up to 12,000,000
shares of its common stock and on July 15, 2019, announced that a total of 12,000,000 shares were properly tendered at a purchase price of $5.20 per share.
During the period following the announcement of the Cooperation Agreement until January 2020, Hestia and Permit sent in various communications and
requests to the Company and representatives of the Company met with Hestia and Permit to discuss their questions or concerns. Also, between March 2019 and the end of fiscal year 2019, the Company repurchased 38.1 million shares for an
aggregate purchase price of $198.7 million under its authorized repurchase program.
On January 15, 2020, Hestia and Permit had a
phone conversation with representatives of the Company, including Mr. Sherman, regarding the Companys holiday sales results press release. During this call, Hestia and Permit indicated they would like to, again, provide further input to
the Board. Mr. Sherman asked Hestia and Permit what input they may have, to which they replied, the Company should add Kurt Wolf of Hestia to the Board, or possibly even John Broderick of Permit.
On February 26, 2020, Mr. Wolf of Hestia contacted Ms. Dunn by telephone and informed her that he and Mr. Broderick intended to
nominate insurgent directors to stand for election at the 2020 annual meeting of stockholders. Mr. Wolf asked Ms. Dunn to join his slate of directors. Ms. Dunn declined to be included on the slate.
Following an extensive candidate search and evaluation process that began in 2019, on March 7, 2020, the Board agreed to (1) appoint William
Simon and James Symancyk to the Board effective immediately and Reginald Fils-Aimé to the Board effective April 20, 2020; and (2) adopt new guidelines for Board tenure and committee refreshment. At such meeting, Dan DeMatteo, Steve
Koonin, Gerald Szczepanski and Larry Zilavy decided to retire from the Board, effective June 2020, and agreed not to stand for re-election at the 2020 annual meeting of stockholders. In addition, Jerome Davis and Tom Kelly decided to retire from the
Board, effective June 2021, and agreed not to stand for re-election at the 2021 annual meeting of stockholders. In addition, the Board agreed that Kathy Vrabeck, the Boards Lead Independent Director, would succeed Mr. DeMatteo as Board
Chair.
On March 9, 2020, the Company announced the appointment of three new independent directors to the Board, the retirement of four
incumbent directors at the 2020 annual meeting and the retirement of two additional incumbent directors at the 2021 annual meeting. Additionally, the Company announced the enhancement of its corporate governance guidelines to target average board
tenure for independent directors of less than 10 years and rotation of Board committee members and chairs approximately every five years.
On
March 10, 2020, Mr. Sherman had a conversation with Hestia and Permit regarding the Companys board refreshment announcement.
On
March 12, 2020, following the expiration of the standstill restrictions contained in the Cooperation Agreement, Hestia and Permit submitted a letter to the Board indicating that they believed the Companys recent Board refreshment
initiatives did not go far enough and that the Company should add two additional stockholder representatives to the Board. Hestia and Permit issued a press release attaching the letter to the Board and filed the letter with the SEC on Schedule 14A,
as well as on an amendment to the Schedule 13-D filing of Hestia, Permit and certain of their respective affiliates.
On March 16, 2020, Hestia
sent a letter to a representative of the Company (the 220 Request), requesting stockholder list materials and other items pursuant to Section 220 of the General Corporation Law of the State of Delaware.
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14 ï 2020 Proxy
Statement
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