1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
STAPLES, INC.
-----------------------------
(Name of Issuer)
Common Stock, Par Value $0.006 Per Share
---------------------------------------------
(Title of Class of Securities)
855030102
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(CUSIP Number)
Barry J. Goldstein Willard G. Fraumann, P.C.
Secretary - - Office Depot, Inc. Kirkland & Ellis
2200 Old Germantown Road 200 East Randolph Drive
Delray Beach, Florida 33445 Chicago, Illinois 60601
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 4, 1996
----------------------------------------
(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 the statement [X]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following page(s))
Page 1 of 10 Pages
Exhibit Index is on Page 10
2
13D
CUSIP No. 855030102 Page 2 of 10 Pages
------------------------ --------- ---------
1 NAME OF REPORTING PERSON
Office Depot, Inc.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 59-2663954
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC, BK, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E)
[ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
31,900,000 /1/
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
31,900,000 /1/
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
WITH
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
31,900,000 /1/
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.6% /2/
14 TYPE OF REPORTING PERSON*
CO
* SEE INSTRUCTIONS BEFORE FILLING OUT!
3
/1/ The shares of common stock of Staples, Inc. ("Staples") covered by
this report are purchasable by Office Depot, Inc. ("Office Depot")
upon exercise of an option granted to Office Depot pursuant to a Stock
Option Agreement dated as of September 4, 1996, and described in Item
4 of this report. Prior to the exercise of the option, Office Depot is
not entitled to any rights as a shareholder of Staples as to the
shares covered by the option. The option may only be exercised upon
the happening of certain events, none of which have occurred as of the
date hereof. Office Depot expressly disclaims beneficial ownership of
any of the shares of common stock of Staples which are purchasable by
Office Depot upon exercise of the option.
The number of shares indicated represents 19.9% of the total
outstanding shares of common stock of Staples as of August 3, 1996,
excluding shares issuable upon exercise of the option.
/2/ Adjusted to reflect the issuance by Staples of 31,900,000 shares of
common stock as described herein.
Page 3 of 10 Pages
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ITEM 1. SECURITY AND ISSUER.
This Schedule 13D relates to the common stock, par value
$0.006 per share (the "Common Stock," an individual share of which is a
"Share"), of Staples, Inc. (the "Issuer"), a Delaware corporation. The
principal executive offices of the Issuer are located at One Research Drive,
Westboro, Massachusetts 01581.
ITEM 2. IDENTITY AND BACKGROUND.
This Schedule 13D is filed by Office Depot, Inc. ("Office
Depot"), a Delaware corporation. Office Depot's principal offices are located
at 2200 Old Germantown Road, Delray Beach, Florida 33445.
Office Depot currently operates 539 office products stores in
37 U.S. states and the District of Columbia and 5 Canadian provinces under the
names "Office Depot," "The Office Place," "Images" and "Furniture at Work."
Office Depot also operates a delivery business, which provides delivery
services of office products to small- and medium-size businesses, as well as a
full service contract stationer service for medium- and large-size businesses,
schools and other educational institutions and governmental agencies. In
addition, Office Depot has entered into licensing arrangements for the
operation of office supply stores in Colombia, Israel, Poland and Thailand and
joint venture agreements to operate stores in France, Mexico and Japan.
During the last five years, to the best of Office Depot's
knowledge, neither Office Depot nor any of its executive officers or directors
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or has been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction resulting in a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws, or finding
any violation with respect to such laws.
Herve Defforey, a director of Office Depot, is a citizen of
France. All other executive officers and directors of Office Depot are citizens
of the United States. The name, business address and present principal
occupation (including the name and address of the corporation or organization
in which such employment is conducted) of each executive officer and director
is set forth in Schedule A to this Schedule 13D and is specifically
incorporated herein by reference.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
This Statement relates to an option granted to Office Depot by
the Issuer to purchase shares of Common Stock from the Issuer as described in
Item 4 below (the "Stock Option"). The Stock Option entitles Office Depot to
purchase up to 31,900,000 shares of Common Stock (the "Option Shares") under
the circumstances specified in the Stock Option Agreement dated as of September
4, 1996 between Office Depot and the Issuer (the "Stock Option Agreement") and
as described in Item 4 below, for a purchase price of $18.5625 per Share (the
"Purchase Price"). Reference is hereby made to the Stock Option Agreement,
which is included as Exhibit 10.2 to the Office Depot Current Report on Form
8-K, dated as of September 6, 1996, File No. 1-10948 (the "Office Depot 8-K"),
for the full text of its terms, including the conditions upon which it may be
exercised.
The Stock Option was granted by the Issuer as an inducement to
Office Depot to enter into the Agreement and Plan of Merger, dated as of
September 4, 1996, among Office Depot, Marlin Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of the Issuer (the "Subsidiary"), and
the Issuer (the "Merger Agreement"). Pursuant to the Merger Agreement and
subject to the conditions set forth therein (including approval by the
stockholders of Office Depot
Page 4 of 10 Pages
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and the Issuer and various regulatory agencies), the Subsidiary will merge with
and into Office Depot (the "Merger"), and each issued and outstanding share of
common stock, par value $.01 per share, of Office Depot will be converted into
the right to receive 1.14 shares of Common Stock of the Issuer. No monetary
consideration was paid by Office Depot to the Issuer for the Stock Option.
In the event the Stock Option becomes exercisable (which will
occur in certain circumstances following the making of an Alternative
Proposal (as defined in the Option Agreement) involving the Issuer) and Office
Depot elects to exercise the Stock Option, Office Depot may either (a) pay the
Purchase Price for the Option Shares in cash or (b) elect, in lieu of the
payment of the Purchase Price and the receipt of the Option Shares, to receive
a cash payment from the Issuer in the amount of the excess of (i) the higher of
the price paid for the Common Stock of the Issuer in an Alternative Transaction
(as defined in the Merger Agreement) or the market price of the Common Stock of
the Issuer over (ii) the Purchase Price. In no event, however, may the Total
Profit (as defined in the Stock Option Agreement to include realized profits
from the Stock Option and amounts received upon certain terminations of the
Merger Agreement) received by Office Depot exceed $150 million. If Office
Depot elects to pay the Purchase Price for the Option Shares, it currently
anticipates that some of the funds therefor will be generated by a combination
of available working capital, bank borrowings and/or funds raised from an
offering of its equity securities.
ITEM 4. PURPOSE OF TRANSACTION.
As stated above, the Stock Option was granted to Office Depot
in connection with the execution of the Merger Agreement. A copy of the Merger
Agreement is included as Exhibit 2.1 to the Office Depot 8-K and is
incorporated herein by reference in its entirety. If the Merger is consummated,
the size of the Issuer's Board of Directors shall be increased to 15 and 6
members of Office Depot's present Board of Directors shall become members of the
Issuer's Board of Directors.
Upon exercise by Office Depot of the Stock Option, in whole or
in part, for at least 16,100,000 Option Shares (such number representing
approximately 10% of the number of outstanding shares of Common Stock on the
date of the Stock Option Agreement), Office Depot shall be entitled to
designate one person to be appointed to the Board of Directors of the Issuer.
In the event that the designee of Office Depot shall cease to serve as a
director for any reason, the vacancy resulting thereby shall be filled by a
designee of Office Depot. Notwithstanding the foregoing, the Issuer shall not
be required to nominate the designee of Office Depot, and shall be entitled to
request and receive the resignation of any designee of Office Depot then
serving on the Board of Directors of the Issuer, at any time that Office Depot
then beneficially owns less than 16,100,000 shares of Common Stock.
The Issuer has retained certain rights of first refusal and
repurchase rights with respect to any shares of Common Stock acquired by Office
Depot upon exercise of the Stock Option, as provided in the Stock Option
Agreement. In addition, Office Depot has the right to cause the Issuer to
repurchase the shares of Common Stock acquired upon exercise of the Stock
Option, as provided in the Stock Option Agreement.
Other than as described above, Office Depot has no plans or
proposals which relate to, or may result in, any of the matters listed in
paragraphs (a) through (j) of Item 4 of Schedule 13D (although Office Depot
reserves the right to develop such plans).
Page 5 of 10 Pages
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The descriptions herein of the Stock Option Agreement and the
Merger Agreement are qualified in their entirety by reference to such
agreements, copies of which are attached hereto as Exhibits 1 and 2,
respectively.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
As a result of the Stock Option, Office Depot may be deemed to
be the beneficial owner of 31,900,000 shares of Common Stock of the Issuer,
which would represent approximately 16.6% of the shares of Common Stock
outstanding after exercise of the Stock Option (based on the number of shares
of Common Stock outstanding on August 3, 1996, as set forth in the Merger
Agreement). Office Depot will have sole voting and dispositive power with
respect to such shares.
The shares of Common Stock described herein are subject to the
Stock Option, which is not currently exercisable. Nothing herein shall be
deemed to be an admission by Office Depot as to the beneficial ownership of any
shares of Common Stock, and Office Depot disclaims beneficial ownership of all
shares of Common Stock of the Issuer issuable upon exercise of the Stock
Option.
Except as described herein, neither Office Depot nor any other
person referred to in Schedule A attached hereto beneficially owns or has
acquired or disposed of any shares of Common Stock of the Issuer during the
past 60 days.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Except for the Merger Agreement and the Stock Option
Agreement, none of the persons named in Item 2 has any contracts, arrangements,
understandings or relationships (legal or otherwise) with any person with
respect to any securities of the Issuer, including, but not limited to,
transfers or voting of any securities, finders fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or loss, or the giving or withholding of proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
EXHIBIT NO. DESCRIPTION
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1 Stock Option Agreement, dated as of September 4, 1996, between Office
Depot, Inc. and Staples, Inc. (incorporated by reference from Exhibit
10.2 to the Office Depot 8-K).
2 Agreement and Plan of Merger, dated as of September 4, 1996, among
Staples, Inc., Marlin Acquisition Corp. and Office Depot, Inc.
(incorporated by reference from Exhibit 2.1 to the Office Depot 8-K).
Page 6 of 10 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this Schedule 13D is true,
complete and correct.
September 13, 1996 Office Depot, Inc.
By:/s/ Barry J. Goldstein
-------------------------------------
Barry J. Goldstein,
Executive Vice President - Finance,
Chief Financial Officer and Secretary
Page 7 of 10 Pages
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SCHEDULE A
Names of Directors and Principal Occupation or Name and Address of
Officers Employment Organization
---------------------- ----------------------- -------------------
David I. Fuente Chairman and Chief Executive Office Depot, Inc.
Director and Officer Officer 2200 Old Germantown Road
Delray Beach, FL 33445
Mark D. Begelman President and Chief Executive Ace Music, Inc.
Director Officer 5900 Powerline Road,
Suite 209
Ft. Lauderdale, FL 33309
Herve Defforey Director of General Finance and Carrefour Direction Generale
Director Administration 6, Avenue Raymond Poincare
B.P. 419-16
75769 Paris Cedex 16
France
W. Scott Hedrick General Partner Interwest Partners
Director 3000 Sand Hill Road
Bldg. 3, Suite 255
Menlo Park, CA 94025
James L. Heskett Faculty Member Harvard Business School
Director Soldiers Field Road
Baker Library 474
Boston, MA 02163
John B. Mumford President Crosspoint Venture Partners
Director One First Street, Suite 2
Los Altos, CA 34022
Michael J. Myers President First Century Partners
Director One Palmer Square,
Suite 425
Princeton, NJ 08542
Peter J. Solomon Chairman and Chief Executive Peter J. Solomon Company
Director Officer 350 Park Avenue
New York, NY 10033
Cynthia Cohen Turk President Marketplace 2000
Director 1001 S. Bayshore Drive,
Suite 1806
Miami, FL 33131
Alan L. Wurtzel Vice Chairman of the Board Circuit City Stores, Inc.
Director 2134 R Street NW
Washington, DC 20008
Barry J. Goldstein Executive Vice President - Office Depot, Inc.
Officer Finance, Chief Financial Officer 2200 Old Germantown Road
and Secretary Delray Beach, FL 33445
Page 8 of 10 Pages
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Names of Directors and Principal Occupation or Name and Address of
Officers Employment Organization
---------------------- ----------------------- -------------------
F. Terry Bean Executive Vice President - Human Office Depot, Inc.
Officer Resources 2200 Old Germantown Road
Delray Beach, FL 33445
Richard M. Bennington Executive Vice President - Office Depot, Inc.
Officer Operations and Sales 2200 Old Germantown Road
Delray Beach, FL 33445
Harry S. Brown Executive Vice President - Office Depot, Inc.
Officer Merchandising 2200 Old Germantown Road
Delray Beach, FL 33445
William P. Seltzer Executive Vice President - Office Depot, Inc.
Officer Systems and Distribution 2200 Old Germantown Road
Delray Beach, FL 33445
Page 9 of 10 Pages
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INDEX TO EXHIBITS
EXHIBIT NO.
1 Stock Option Agreement, dated as of September 4, 1996, between Office
Depot, Inc. and Staples, Inc. (incorporated by reference from Exhibit
10.2 to Office Depot's Current Report on Form 8-K, dated September 6,
1996, File No. 1-10948 (the "Office Depot 8-K")).
2 Agreement and Plan of Merger, dated as of September 4, 1996, among
Staples, Inc., Marlin Acquisition Corp. and Office Depot, Inc.
(incorporated by reference from Exhibit 2.1 to the Office Depot 8-K).
Page 10 of 10 Pages
