SKS » Topics » Item 1.01. Entry Into a Material Definitive Agreement.

This excerpt taken from the SKS 8-K filed Oct 21, 2009.

Item 1.01 Entry into a Material Definitive Agreement.

On April 15, 2003, Saks Incorporated (the “Company”) and McRae’s, Inc., entered into a program agreement (“Program Agreement”) with Household Bank (SB), N.A. now known as HSBC Bank Nevada, N.A., (“HSBC”), pursuant to which HSBC owns and issues, to our customers, proprietary credit cards. Under the terms of the Program Agreement, HSBC assumes substantially all risks while sharing with us certain revenue generated by interest and fees on the portfolio. We and HSBC have entered into several amendments to the Program Agreement since 2003.

On October 19, 2009, we and HSBC entered into a Fifth Amendment to the Program Agreement (the “Fifth Amendment”), in response to macroeconomic conditions and portfolio performance, which provides for certain changes to the allocation of risk and revenue sharing between the Parties (as defined in the Fifth Amendment). The Fifth Amendment, which becomes effective February 1, 2010, provides for HSBC to share certain credit losses with us on the card portfolio. The Fifth Amendment also provides to us increased revenue sharing. Although the overall positive or negative impact associated with the changes in the Fifth Amendment is uncertain, the payments we would owe that are associated with these changes are capped annually, and decline year over year. Based on current micro and macro trends, it is management’s estimation that aggregate payments to HSBC that are associated with the Fifth Amendment changes will be in the $10 million to $15 million range over the term of the Program Agreement, which expires by its terms in April 2013, with an aggregate cap at $34 million over the term of the Program Agreement.

The foregoing description of the Fifth Amendment does not purport to be complete and is qualified in its entirety by reference to the Fifth Amendment, which is filed as Exhibit 99.1 to this Current Report on Form 8-K.

This excerpt taken from the SKS 8-K filed Oct 1, 2009.

Item 1.01. Entry Into a Material Definitive Agreement.

Underwriting Agreement

          On September 30, 2009, Saks Incorporated (the “Company”), entered into an Underwriting Agreement (the “Underwriting Agreement”) with Goldman, Sachs & Co. and Morgan Stanley & Co. Incorporated, as representatives of the several underwriters named in Schedule I thereto (collectively, the “Underwriters”), providing for the offer and sale by the Company of 14,925,373 shares of its common stock, par value $0.10 per share, at a price to the public of $6.70 per share (the “Shares”). The closing of the sale of the Shares is expected to occur on October 6, 2009.

          In addition, pursuant to the Underwriting Agreement, the Company has granted to the Underwriters a 30-day option to purchase up to an additional 2,238,805 Shares.

          The Underwriting Agreement includes representations, warranties and covenants by the Company customary for agreements of this nature. It also provides for customary indemnification by each of the Company and the Underwriters against certain liabilities arising out of or in connection with the sale of the Shares and customary contribution provisions in respect of those liabilities.

          The foregoing description of the material terms of the Underwriting Agreement is qualified in its entirety by reference to the Underwriting Agreement, which is attached hereto as Exhibit 1.1 and incorporated herein by reference.

This excerpt taken from the SKS 8-K filed Oct 6, 2006.

Item 1.01 Entry Into A Material Definitive Agreement.

In connection with the consummation of the transaction described in Item 2.01, Saks Incorporated (the “Company”) entered into a Transition Services Agreement with Belk, Inc. (“Belk”) dated September 30, 2006 (the “Parisian TSA”). Pursuant to the Parisian TSA, the Company will continue to provide, for varying transition periods, back office services related to the Company’s former Parisian specialty department store business (“Parisian”). The back-office services include information technology, telecommunications, credit, accounting and store planning services, among others. Additional information regarding the Parisian TSA contained in Item 9.01(b) of this Current Report on Form 8-K is incorporated by reference herein. The description of the Parisian TSA contained in this Current Report on Form 8-K is qualified in its entirety by reference to the text of the Parisian TSA, which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.

This excerpt taken from the SKS 8-K filed Sep 22, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

On September 22, 2006 the Human Resources and Compensation Committee of the Board of Directors of Saks Incorporated (the “Company”) made an award of 314,156 shares of unrestricted stock to Mr. R. Brad Martin, the Company’s Chairman of the Board, to satisfy in full the Company’s obligation to Mr. Martin contained in section 3(e) of the Amended and Restated Employment Agreement between him and the Company dated December 8, 2004 (Exhibit 10.1 to the Company’s Form 10-Q for the quarterly period ended October 30, 2004). The Human Resources and Compensation Committee made the award in accordance with section 8 of the Company’s 2004 Long-Term Incentive Plan (Exhibit B to the proxy statement of Saks Incorporated filed April 28, 2004).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  SAKS INCORPORATED
Date: September 22, 2006  

/s/ Charles J. Hansen

  Executive Vice President and General Counsel
This excerpt taken from the SKS 8-K filed Sep 21, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

On September 20, 2006 Saks Incorporated (the “Company”) and Julia A. Bentley, the Company’s Senior Vice President-Investor Relations and Communications (the “Executive”), entered into an Employment Agreement dated September 15, 2006 (the “Employment Agreement”).

The following is a brief description of the terms and conditions of the Employment Agreement that are material to the Company: (1) the Employment Agreement has no term; (2) base salary of not less than $279,195 per year; (3) the Executive is eligible for a yearly cash bonus, which at the target level is 20% of base salary; (4) the Company may terminate the Employment Agreement at any time without cause and the Executive may terminate the Employment Agreement for good reason, in either case upon ten-days’ prior written notice to the other; (5) “good reason” is defined as (i) mandatory relocation of the Executive’s principal place of employment from the Alcoa, Tennessee area, or (ii) the failure of any successor to the Company, after a change in control, to agree to perform unconditionally the obligations of the Company under the Employment Agreement; (6) to receive severance benefits the Executive must sign and deliver to the Company a written release in form and substance reasonably satisfactory to the Company; (7) if the Company terminates the Executive’s employment without cause, or if the Executive terminates the Executive’s employment for good reason, and the termination occurs prior to, and not in anticipation of, a change in control, the Company will pay the Executive a severance amount equal to one times the Executive’s base salary; (8) if the Company terminates the Executive’s employment without cause, or if the Executive terminates the Executive’s employment for good reason, and the termination occurs in anticipation of, or on or after, a change in control, the Company will pay the Executive a severance amount equal to two times the Executive’s base salary; (9) if termination of the Executive’s employment without cause or for good reason occurs, the Executive is entitled to participate at the Company’s expense in the Company’s health plans with family coverage for two years from the date of termination (at the Company’s election with respect to the last six months of the two-year period, the Company may pay the Executive a lump sum amount sufficient to enable the Executive to obtain comparable health-plan coverage for the six-month period); (10) if the Company terminates the Employment Agreement without cause the Executive will be entitled to a severance payment under the Company’s 2000 Change of Control and Material Transaction Severance Plan if that plan provides for a larger severance payment and if the Executive waives the Executive’s rights to a severance payment under the Employment Agreement; (11) if the Executive violates the Employment Agreement’s non-solicitation/non-competition requirements the Company’s obligation to make a severance payment will terminate; (12) if the Executive’s employment terminates due to the Executive’s death, the Executive’s estate will be entitled to the benefits provided by the Company’s benefit plans; (13) if the Executive becomes disabled, the Executive’s employment will continue for a period of 12 months and the Executive will continue to receive during such period all payments and benefits provided by the Employment Agreement, including payments and benefits payable upon termination of the Executive’s employment, less all disability payments received pursuant to the Company’s disability plans, and if the Executive’s disability continues after the end of the 12-month period, the Company may terminate the Executive’s employment for disability and the Executive will be entitled to the benefits provided by the Company’s benefit plans (but no severance payment or benefit); (14)


the Company may terminate the Employment Agreement for cause in which event no base salary, bonus, or severance payment will be paid to the Executive following termination; (15) for purposes of the Employment Agreement, “cause” means (i) conviction of the Executive for, or the Executive’s plea of guilty or nolo contendere with respect to, a felony or any crime involving moral turpitude, fraud, or embezzlement that discredits the Company or is detrimental to the reputation or goodwill of the Company, (ii) commission of any material act of fraud or dishonesty by the Executive against the Company or commission of an immoral or unethical act that materially reflects negatively on the Company, if first the Executive is provided with written notice of the claim and with an opportunity to contest it before the Human Resources and Compensation Committee of the Board of Directors (the “Committee”), (iii) the Executive’s violation of the Company’s Code of Business Conduct and Ethics, which violation the Executive knows or reasonably should know could reasonably be expected to materially discredit the Company or be materially detrimental to the reputation or goodwill of the Company, if first the Executive is provided with written notice of the violation and with an opportunity to contest it before the Committee, or (iv) the Executive’s continual and material breach of the Executive’s obligations under the Employment Agreement to serve the Company diligently, as determined by the Committee after the Executive has been given written notice of the breach and a reasonable opportunity to cure the breach; (16) the Executive will maintain the confidentiality of the Company’s proprietary and confidential information; (17) for one year following termination the Executive will not engage in specified categories of associations with specified competitors, will not disparage the Company, and will not solicit any employee of the Company to leave that employment; (18) if the Executive brings an action to enforce the Executive’s rights under the Employment Agreement, the Company will reimburse the Executive for the Executive’s costs, including attorney’s fees, incurred, with interest thereon, provided that if such action includes a finding denying the Executive’s claims in total, the Executive will be required to reimburse the Company over a 12-month period; (19) the Executive will reasonably cooperate in good faith with the Company as and when requested by the Company with regard to all current and future internal and government inquiries and investigations, litigation and administrative agency proceedings, and other legal or accounting matters and, following termination of the Employment Agreement, the Company will reimburse the Executive for the Executive’s reasonable out-of-pocket expenses and, except in specified situations, pay the Executive $375 per hour for the Executive’s services; and (20) the Company may assign its obligations under the Employment Agreement to any acquirer of, or other successor to, all or substantially all of the business of the Company (whether direct or indirect, by purchase of assets or the Company’s common stock, merger, consolidation or otherwise) if the successor agrees to assume and perform unconditionally the Company’s obligations under the Employment Agreement.

The foregoing summary of the Employment Agreement is qualified in its entirety by reference to the full text of the Employment Agreement, a copy of which is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

This excerpt taken from the SKS 8-K filed Aug 7, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

On August 1, 2006, Saks Incorporated (the “Company”) and Belk, Inc. (“Buyer”) entered into a Stock Purchase Agreement dated as of August 1, 2006 (the “Purchase Agreement”).

Pursuant to the Purchase Agreement, Buyer will purchase all of the outstanding equity interests of certain of the Company’s subsidiaries that conduct the Parisian specialty department store business (the “Business”) for a purchase price of $285 million in cash, subject to adjustment based on changes in working capital. The closing is expected to occur in the third fiscal quarter of 2006.

The Purchase Agreement contains customary representations, warranties and covenants. The Company’s indemnification obligation for breach of representations and warranties will be subject to a $25,000 per claim threshold, an aggregate deductible equal to 1.6% of the purchase price, and an aggregate cap of 9.6% of the purchase price. Representations and warranties will generally survive for 12 months after closing.

The closing conditions include (a) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (b) no order of any governmental body restraining or prohibiting the consummation of the transaction, (c) performance by the Company and Buyer in all material respects of all material covenants and agreements required by the Purchase Agreement to be performed at or prior to the closing, (d) representations and warranties being true at closing except as would not have a material adverse effect and (e) evidence that (i) liens on the assets of the Business under the Company’s credit agreement and (ii) guaranties of the companies being sold to Buyer pursuant to the Purchase Agreement, under the credit agreement and indentures, will be released.

Buyer will continue the employment immediately after closing of all employees of the Business with at least the same base wages, annual base salary and annual rate of bonus potential at target performance levels provided to such employees prior to closing. If employees of the Business participating in the Company’s Amended and Restated 2000 Change in Control and Material Transaction Severance Plan, as amended (the “Severance Pay Plan”), become entitled to severance benefits pursuant to the “change of control” provisions thereunder (giving effect to the treatment of the transactions contemplated by the Purchase Agreement as a “change of control” under the Severance Pay Plan), Buyer will provide to such employees the severance pay and other benefits provided under the Severance Pay Plan in lieu of any severance to which such employees would be entitled under Buyer’s plans. Employees of the Business who are not participants in the Severance Pay Plan and whose employment is involuntarily terminated by Buyer during the fiscal year in which the closing occurs will receive from Buyer severance pay and other benefits that are at least equal to the Company’s severance guidelines. Buyer will provide to all retained employees of the Business benefits that are at least comparable to the benefits that are made available to employees of Buyer who perform comparable services or undertake comparable responsibilities for Buyer and who have completed the same length of service with Buyer.

Prior to closing, Buyer will be obligated to, with respect to the stores being sold, either (a) enter into a program agreement with Household Bank (SB), N.A. (now known as HSBC Bank Nevada, N.A.) that is acknowledged by Household Bank to satisfy the requirements of the Program Agreement between the Company and Household Bank (SB), N.A. dated as of April 15, 2003, as amended, or (b) purchase the accounts and account receivables associated with such stores from Household Bank for a specified price, plus a premium. Additionally, the Company and Buyer will enter into a transition services agreement, a private brands agreement, a software license agreement, a sublease agreement and a Club Libby Lu licensed departments agreement in connection with the transaction.

A copy of the Purchase Agreement is attached to, and incorporated by reference in, this Current Report on Form 8-K as Exhibit 99.1. The foregoing description of the Purchase Agreement is qualified in its entirety


by reference to the full text of the Purchase Agreement. A copy of the Company’s news release dated August 2, 2006 disclosing, among other things, that the Company and Buyer entered into the Purchase Agreement is attached to, and incorporated by reference in, this Item of this Current Report on Form 8-K as Exhibit 99.2.

The summary disclosure above and the Purchase Agreement attached as Exhibit 99.1 to this Current Report on Form 8-K are being furnished to provide information regarding the terms of the Purchase Agreement. No representation, warranty, covenant, or agreement described in the summary disclosure or contained in the Purchase Agreement is, or should be construed as, a representation or warranty by the Company to any investor or covenant or agreement of the Company with any investor. The representations, warranties, covenants and agreements contained in the Purchase Agreement are solely for the benefit of the Company and Buyer, may represent an allocation of risk between the parties, may be subject to standards of materiality that differ from those that are applicable to investors and may be qualified by disclosures between the parties.

This excerpt taken from the SKS 8-K filed Jun 9, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

On June 8, 2006, the Company entered into Employment Agreements, each dated that date (each, an “Employment Agreement” and collectively, the “Employment Agreements”), with each of the following persons (each an “Executive” and collectively, the “Executives”): James A. Coggin, President and Chief Administrative Officer of the Company; Douglas E. Coltharp, Executive Vice President and Chief Financial Officer of the Company; Charles J. Hansen, Executive Vice President and General Counsel of the Company; and Kevin G. Wills, Executive Vice President of Finance and Chief Accounting Officer of the Company. The Company routinely enters into employment agreements with its senior key executives. These agreements typically include retention and performance incentives for the executives and protections for the Company, such as non-competition and non-solicitation provisions and the requirement that all agreement disputes be arbitrated. The Company entered into the Employment Agreements to seek to retain the Executives following the sale of the Company’s traditional department store businesses and in connection with the strategic alternatives process for the Company’s Parisian business. The Company also intends that the Employment Agreements will further motivate the Executives to achieve the Company’s business goals.

The Employment Agreements provide for annual base salaries of not less than the following: $856,980 for Mr. Coggin; $642,735 for Mr. Coltharp; $439,875 for Mr. Hansen; and $455,271 for Mr. Wills. The Employment Agreements also provide for annual cash bonuses, which at the target level are not less than the following percentages of base salary: 60% for Mr. Coggin, 50% for Mr. Coltharp, and 40% for Messrs. Hansen and Wills.

In the case of Mr. Hansen, the Employment Agreement also provides for a benefit or arrangement that has an economic value equal to the economic value of the benefit that would have been provided to Mr. Hansen pursuant to the Company’s Carson Pirie Scott & Co. Supplemental Executive Retirement Plan but for the Company’s termination of Mr. Hansen’s participation in such plan effective March 4, 2006.

In the case of Mr. Wills, the Employment Agreement also provides that if Mr. Wills is continuously employed by the Company to May 11, 2007, he will receive a cash amount equal to the closing price on May 11, 2007 of 10,000 shares of the Company’s common stock, plus the dividends paid with respect to 10,000 shares of the Company’s common stock from May 13, 2005 to May 11, 2007, less deductions as required by law (the “cash payment”). If a change in control (as defined in the Company’s 2004 Long-Term Incentive Plan) occurs and all of Mr. Wills’s unvested shares of restricted stock vest, the cash payment also will vest, and the amount thereof will be based on the per-share consideration in the change-in-control transaction.

The following is a description of the other terms and conditions of the Employment Agreements that are material to the Company: (1) none of the Employment Agreements has a term of employment, and the Company may terminate each of the Employment Agreements at any time without cause and each of the Executives may terminate his Employment Agreement for good reason; (2) ”good reason” is defined as (i) a mandatory relocation of the Executive’s principal place of employment from the Birmingham, Alabama area (or, in the case of Mr. Coggin, from the Jackson, Mississippi area) or the Executive experiences an employment action that reasonably would be deemed to be a demotion (or, in the case of Mr. Coltharp, that reasonably would be deemed to be a reduction in duties or status), (ii) the Executive’s position reasonably would be deemed to have been eliminated as a result of a corporate

 

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restructuring, (iii) in the case of Messrs. Coggin, Hansen and Wills, a reduction in the Executive’s duties or status in anticipation of, or on or after, a change in control, (iv) the failure of any successor to the Company, after a change in control, to agree to assume and perform unconditionally the obligations of the Company under the Employment Agreement, or (v) in the case of Mr. Coggin, the Executive reaches the age of 64 years and nine months and gives the Company at least 90 days notice of termination due to retirement; (3) if termination without cause occurs and the termination is for performance deficiencies that are not remedied to the Company’s reasonable satisfaction (“performance deficiencies”), (i) the Company will pay the Executive an amount equal to two times the Executive’s base salary and one times the Executive’s target bonus potential, and (ii) unvested stock options and restricted stock awards that would have vested at the end of the annual vesting period in which the termination occurs will vest, prorated to the date of termination in such annual vesting period (and in the case of each of Mr. Coggin and Mr. Coltharp, 33,334 shares of restricted stock that would have vested on November 1, 2010 will vest, prorated from December 1, 2002 to the month in which the termination occurs, and in the case of Mr. Wills, the cash payment will vest, prorated from May 11, 2005 to the date of termination, with the amount thereof based on the closing price of the Company’s common stock on the date of termination); (4) if (i) termination without cause occurs and the termination is not for performance deficiencies, or (ii) if the Executive terminates his employment for good reason, (a) the Company will pay the Executive an amount equal to three times the Executive’s base salary and one times the Executive’s target bonus potential, (b) the Executive’s unvested stock option awards, restricted stock awards and the target amount of performance share awards will vest (and in the case of Mr. Wills, the cash payment will vest, with the amount thereof based on the closing price of the Company’s common stock on the date of termination) and the Executive will have the right to exercise each such stock option until the later of December 31 of the year in which the termination occurs and the 15th day of the third month following the month in which the termination occurs, but in no event later than 10 years from the date of grant of the stock option, (c) the Executive will be entitled to participate in the same manner as an associate in the Company’s health plans with family coverage for 18 months from the date of termination unless the Executive obtains through subsequent employment equivalent medical coverage, and the Company will reimburse the Executive for COBRA costs less normal associate costs and, if the Executive has not obtained equivalent medical coverage at the end of the 18-month period, the Company will pay to the Executive a lump sum amount, not to exceed $250,000, sufficient to enable the Executive to obtain equivalent medical coverage for an additional 18-month period, and the Executive will repay any unused portion of such amount if the Executive obtains through subsequent employment equivalent medical coverage during the additional 18-month period, and (d) the Executive will be entitled to outplacement services for a six-month period; (5) to receive severance benefits if termination without cause occurs or if the Executive terminates his employment for good reason, the Executive must sign and deliver to the Company a written release substantially in the form attached to the Employment Agreement; (6) if termination without cause occurs or if the Executive terminates his employment for good reason, the Executive will be entitled to a severance payment under the Company’s 2000 Change of Control and Material Transaction Severance Plan if the plan provides for a larger severance payment than that provided by his Employment Agreement and the Executive waives his right to a severance payment under his Employment Agreement; (7) if termination without cause occurs or if the Executive terminates his employment for good reason, the Executive will be entitled, for the remainder of his lifetime, to the normal associate discount in effect from time to time applicable to active associates of the Company or its successors; (8) if the Executive violates the non-competition requirements of his Employment Agreement the Company’s obligation to make a severance payment would terminate; (9) if any severance payment would be subject to the excise tax imposed by Section 4999 of the Internal Revenue

 

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Code, the Company will make a gross-up payment to the Executive with respect to such tax if the severance payment subject to the excise tax exceeds a specified threshold; (10) the Company may terminate each of the Employment Agreements for cause in which event no base salary, bonus, or severance payment will be paid to the Executive following termination; (11) for purposes of each of the Employment Agreements, “cause” means (i) conviction of the Executive for, or the Executive’s plea of guilty or nolo contendere with respect to, a felony or any crime involving moral turpitude, fraud, or embezzlement that discredits the Company or is detrimental to the reputation or goodwill of the Company, (ii) commission of any material act of fraud or dishonesty by the Executive against the Company or commission of an immoral or unethical act that materially reflects negatively on the Company, if first the Executive is provided with written notice of the claim and with an opportunity to contest it before the Board of Directors, (iii) the Executive’s violation of the Company’s Code of Business Conduct and Ethics, which violation the Executive knows or reasonably should know could reasonably be expected to materially discredit the Company or be materially detrimental to the reputation or goodwill of the Company, if first the Executive is provided with written notice of the violation and with an opportunity to contest it before the Board of Directors, or (iv) the Executive’s continual and material breach of the Executive’s obligations under the Employment Agreement to serve the Company diligently, as determined by the Human Resources and Compensation Committee of the Board of Directors after the Executive has been given written notice of the breach and a reasonable opportunity to cure the breach; (12) if the Executive’s employment terminates due to the Executive’s death, the Executive’s estate will be entitled to the benefits provided by the Company’s benefit plans; (13) if the Executive becomes disabled, the Executive’s employment will continue for a period of 12 months and the Executive will continue to receive during such period all payments and benefits provided by his Employment Agreement, including payments and benefits payable upon termination of the Executive’s employment, less all disability payments received pursuant to the Company’s disability plans, and if the Executive’s disability continues after the end of the 12-month period, the Company may terminate the Executive’s employment for disability and the Executive will be entitled to the benefits provided by the Company’s benefit plans (but no severance payment or benefit); (14) each Executive will maintain the confidentiality of the Company’s proprietary and confidential information; (15) for one year following termination each Executive will not engage in specified categories of associations with specified competitors, will not disparage the Company, and will not solicit any employee of the Company to leave that employment; (16) except for the Company’s right to an injunction to prevent any violation of the Executive’s covenants with respect to non-competition, non-solicitation, confidentiality and non-disparagement, all disputes and controversies between the Company and the Executive, whether relating to the Executive’s Employment Agreement or otherwise, will be settled by arbitration; (17) if any Executive brings an action to enforce his rights under his Employment Agreement, the Company will reimburse the Executive for his costs, including attorney’s fees, incurred, with interest thereon, provided that if such action includes a finding denying the Executive’s claims in total, the Executive will be required to reimburse the Company over a 12-month period; (18) the Executive will reasonably cooperate in good faith with the Company as and when requested by the Company with regard to all current and future internal and government inquiries and investigations, litigation and administrative agency proceedings, and other legal or accounting matters and, following termination of the Employment Agreement, the Company will reimburse the Executive for his reasonable out-of-pocket expenses and, except in specified situations, pay the Executive $375 per hour for his services; and (19) the Company may assign its obligations under the Employment Agreements to any acquirer of, or other successor to, all or substantially all of the business of the Company (whether direct or indirect, by purchase of assets or the Company’s common stock, merger, consolidation or otherwise) if the successor agrees to assume and perform unconditionally the Company’s obligations under the Employment Agreements.

 

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The foregoing summary of the Employment Agreements is qualified in its entirety by reference to the full text of the Employment Agreements, copies of which are included as Exhibits 99.1, 99.2, 99.3 and 99.4 to this Current Report on Form 8-K and are incorporated herein by reference.

 

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This excerpt taken from the SKS 8-K filed Mar 10, 2006.

Item 1.01 Entry Into A Material Definitive Agreement.

In connection with the consummation of the transaction described in Item 2.01, Saks Incorporated (the “Company”) entered into a Transition Services Agreement with The Bon-Ton Stores, Inc. (“Bon-Ton” or “Buyer”) which was amended and restated on March 10, 2006 (the “Bon-Ton TSA”). Pursuant to the Bon-Ton TSA, the Company will continue to provide, for varying transition periods, back office services related to the Company’s former Northern Department Store Group operations. The back-office services include certain information technology, telecommunications, credit, accounting and store planning services, among others. Additional information regarding the Bon-Ton TSA contained in Item 9.01(b) is incorporated by reference herein. The description of the Bon-Ton TSA contained in this Current Report on Form 8-K is qualified in its entirety by reference to the text of the Bon-Ton TSA, which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.

This excerpt taken from the SKS 8-K filed Feb 21, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

 

On February 16, 2006, Saks Incorporated (the “Company”) and The Bon-Ton Stores, Inc. (“Buyer”) entered into Amendment No. 1 (the “Amendment”) to the Purchase Agreement dated as of October 29, 2005 (as amended by the Amendment, the “Purchase Agreement”), which was previously filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated November 3, 2005. The Purchase Agreement relates to the previously announced sale of the Company’s Northern Department Store Group (an operating division of the Saks Department Store Group), which operates stores under the business names “Carson Pirie Scott,” “Bergner’s,” “Boston Store,” “Herberger’s” and “Younkers” (the “Business”).

 

The Amendment confirms the desire of the parties to close the transactions contemplated by the Purchase Agreement on or about March 6, 2006. The Amendment provides that, to the extent that the portion of the financing of the acquisition of the Business structured as an offering of senior unsecured notes has not been consummated, the date on which Buyer will be required to borrow funds under a bridge loan to complete the acquisition is March 13, 2006 provided the bridge loan is available at that time. The Amendment also delays the date on which either party may terminate the Purchase Agreement under certain circumstances from any time after March 20, 2006 to any time after April 3, 2006.

 

A copy of the Amendment is attached to, and incorporated by reference in, this Current Report on Form 8-K as Exhibit 99.1. The foregoing description of the Amendment is qualified in its entirety by reference to the full text of the Amendment. The summary disclosure above and the Amendment attached as Exhibit 99.1 to this Current Report on Form 8-K are being furnished to provide information regarding certain terms of the Purchase Agreement. No representation, warranty, covenant, or agreement described in the summary disclosure or contained in the Purchase Agreement is, or should be construed as, a representation or warranty by the Company to any investor or covenant or agreement of the Company with any investor. The representations, warranties, covenants and agreements contained in the Purchase Agreement are solely for the benefit of the Company and Buyer, may represent an allocation of risk between the parties, may be subject to standards of materiality that differ from those that are applicable to investors and may be qualified by disclosures between the parties.

 

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This excerpt taken from the SKS 8-K filed Feb 1, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

 

On January 26, 2006, Saks Incorporated (the “Company”) entered into a second amendment and waiver (the “Second Amendment”) to its senior secured revolving financing facility with a syndicate of lenders including Fleet Retail Group, LLC, as administrative agent (the “Credit Facility”). In addition to certain technical modifications and waivers, the Second Amendment amends the Credit Facility to reduce the interest rate margin on borrowings and to permit the Company’s sale to The Bon-Ton Stores, Inc. of all of the outstanding equity interests of certain of the Company’s subsidiaries holding, directly or indirectly, the Company’s Northern Department Store Group (an operating division of the Saks Department Store Group which operates stores under the business names “Carson Pirie Scott,” “Bergner’s,” “Boston Store,” “Herberger’s” and “Younkers”) pursuant to a Purchase Agreement dated as of October 29, 2005 (the “NDSG Transaction”), and, from and after the consummation of the NDSG Transaction, to reduce the aggregate amount of the Credit Facility to $500 million. Upon the consummation of the NDSG Transaction and after the satisfaction of other specified conditions, the Company will have the right to increase the aggregate amount of the Credit Facility to $700 million.

 

Depending on the type of borrowing by the Company, the applicable interest rate under the Credit Facility, as amended by the Second Amendment, is calculated as a per annum rate equal to (a) LIBOR plus an interest rate margin for LIBOR loans or (b) the greater of (x) the prime rate or (y) the federal funds effective rate plus 0.5%. Until the consummation of the NDSG Transaction, the interest rate margin for LIBOR loans is 1.00% if the average historical availability under the Credit Facility is greater than $400 million, 1.25% if the average historical availability under the Credit Facility is less than $400 million but greater than or equal to $200 million, and 1.50% if the average historical availability under the Credit Facility is less than $200 million. After the consummation of the NDSG Transaction, the interest rate margin for LIBOR loans is 1.00% if the average historical availability under the Credit Facility is greater than $350 million, 1.25% if the average historical availability under the Credit Facility is less than $350 million but greater than or equal to $150 million, and 1.50% if the average historical availability under the Credit Facility is less than $150 million.

 

The Credit Facility is filed as an exhibit to the Company’s Current Report on Form 8-K dated March 16, 2004. For more information about the NDSG Transaction, including a description of specified conditions to the closing of the NDSG Transaction, see the Company’s Current Report on Form 8-K dated October 29, 2005.

 

A copy of the Second Amendment is attached to, and incorporated by reference in, this Current Report on Form 8-K as Exhibit 10.1. The foregoing description of the Second Amendment is qualified in its entirety by reference to the full text of the Second Amendment.

 

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This excerpt taken from the SKS 8-K filed Nov 3, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

On October 29, 2005 Saks Incorporated (the “Company”) and The Bon-Ton Stores, Inc. (“Buyer”) entered into a Purchase Agreement dated as of October 29, 2005 (the “Purchase Agreement”).

 

Pursuant to the Purchase Agreement, Buyer will purchase all of the outstanding equity interests of certain of the Company’s subsidiaries holding, directly or indirectly, the Company’s Northern Department Store Group (an operating division of the Saks Department Store Group), which operates stores under the business names “Carson Pirie Scott,” “Bergner’s,” “Boston Store,” “Herberger’s” and “Younkers” (the “Business”) for a purchase price of approximately $1.1 billion in cash (subject to adjustment based on changes in working capital and the final treatment of one store that requires landlord consent), plus the assumption of approximately $50 million of unfunded benefit liabilities and approximately $35 million of capital leases. The closing is expected to occur early in the Company’s first fiscal quarter of 2006 and will not occur prior to January 30, 2006.

 

The Purchase Agreement contains customary representations, warranties and covenants. The Company’s indemnification obligation for breach of representations and warranties will be subject to a $50,000 per claim deductible, an $11 million aggregate deductible, and an aggregate cap of 15% of the purchase price. Representations and warranties will generally survive until March 31, 2007. In addition, within specified periods prior to and after closing, the Company has agreed to deliver certain additional financial statements and other information, in each case relating to the Business.

 

The closing conditions include (a) Buyer having available to it the proceeds of the financing contemplated by a commitment letter with Bank of America, N.A. (or such other substitute financing in accordance with the Purchase Agreement), (b) expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (c) no order of any governmental body restraining or prohibiting the consummation of the transaction, (d) performance by the Company and Buyer in all material respects of all covenants and agreements required by Purchase Agreement to be performed at or prior to the closing, (e) representations and warranties being true at closing except as would not have a material adverse effect and (f) evidence that (i) liens on the assets of the Business under the Company’s credit agreement and (ii) guaranties of the companies being sold to Buyer pursuant to the Purchase Agreement (and their subsidiaries), under the credit agreement and indentures, will be released.

 

Buyer will continue the employment of all employees of the Business, at a rate of compensation (base wages and base salary) that is at least the same as that to which such employees are entitled prior to closing for a period of at least one year thereafter. If specified employees of the Business become entitled to severance benefits under the Company’s Amended and Restated 2000 Change in Control and Material Transaction Severance Plan, as amended (the “Severance Pay Plan”), pursuant to the “change of control” provisions thereunder (giving effect to the treatment of the transactions contemplated by the Purchase Agreement as a “change of control” under the Severance Pay Plan), Buyer will provide to such employees the severance pay and other benefits provided under the Severance Pay Plan. Other employees of the Business who are involuntarily terminated within 12 months following the closing will receive from Buyer severance benefits that are at least equal to the severance pay and other benefits offered to comparably placed employees of Buyer. Buyer will provide to all retained employees of the Business, for a period of one year following the closing, benefits that are comparable, in the aggregate, to the benefits provided to those employees as of the closing (subject to certain exceptions).

 

Prior to closing, Buyer will be obligated to, with respect to the stores being sold, either (a) enter into a program agreement with Household Bank (SB), N.A. (now known as HSBC Bank Nevada, N.A.) that is acknowledged by Household Bank to satisfy the requirements of the Program Agreement between the Company and Household Bank (SB), N.A. dated as of April 15, 2003, as amended, or (b) purchase the accounts and

 

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account receivables associated with such stores from Household Bank for a specified price, plus a premium. Additionally, the Company and Buyer will enter into transition services agreements, a private brands agreement, a trademark license agreement, a software license agreement and a Club Libby Lu licensed department agreement in connection with the transaction.

 

A copy of the Purchase Agreement is attached to, and incorporated by reference in, this Current Report on Form 8-K as Exhibit 99.1. The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase Agreement. A copy of the Company’s news release dated October 31, 2005 disclosing, among other things, that the Company and Buyer entered into the Purchase Agreement is attached to, and incorporated by reference in, this Current Report on Form 8-K as Exhibit 99.2.

 

The summary disclosure above and the Purchase Agreement attached as Exhibit 99.1 to this Current Report on Form 8-K are being furnished to provide information regarding the terms of the Purchase Agreement. No representation, warranty, covenant, or agreement described in the summary disclosure or contained in the Purchase Agreement is, or should be construed as, a representation or warranty by the Company to any investor or covenant or agreement of the Company with any investor. The representations, warranties, covenants and agreements contained in the Purchase Agreement are solely for the benefit of the Company and Buyer, may represent an allocation of risk between the parties, may be subject to standards of materiality that differ from those that are applicable to investors and may be qualified by disclosures between the parties.

 

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This excerpt taken from the SKS 8-K filed Aug 25, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

Effective August 22, 2005 Saks Incorporated (the “Company”) entered into an Instrument of Resignation, Appointment and Acceptance, dated as of August 22, 2005, by and among the Company, J.P. Morgan Trust Company, National Association (the “Resigning Trustee”), and The Bank Of New York Trust Company, N.A. (the “Successor Trustee”) with respect to the Indenture for each of the following: 8 1/4 Notes due 2008; 7 1/2 Notes due 2010; 9 7/8 Notes due 2011; and 7 3/8 Notes due 2019 (each an “Instrument of Resignation”). Each Instrument of Resignation provides that (1) the Resigning Trustee assigns, transfers, delivers, and confirms to the Successor Trustee all right, title, and interest of the Resigning Trustee in and to the trust created by the Indenture described in the Instrument of Resignation, all the rights, powers, and trusts of the Resigning Trustee under the Indenture, and all property and money held by the Resigning Trustee under the Indenture, with like effect as if the Successor Trustee were originally named as Trustee under the Indenture, and the Resigning Trustee resigns as Trustee, Registrar, Paying Agent, and Agent under the Indenture, (2) the Company accepts the resignation of the Resigning Trustee as Trustee, Registrar, Paying Agent, and Agent under the Indenture and appoints the Successor Trustee as Trustee, Registrar, Paying Agent, and Agent under the Indenture, and (3) the Successor Trustee accepts its appointment as Trustee under the Indenture and assumes all the rights, powers, and trusts of the Trustee under the Indenture and with respect to all property and money held or to be held under the Indenture, with like effect as if the Successor Trustee were originally named as Trustee under the Indenture and accepts its appointment as Registrar, Paying Agent, and Agent under the Indenture.

 

Copies of the four Instruments of Resignation are attached to, and incorporated by reference into this Item of, this Current Report on Form 8-K as Exhibits 4.1, 4.2, 4.3, and 4.4. The foregoing description of each Instrument of Resignation is qualified in its entirety by reference to the full text of the Instrument of Resignation.

 

This excerpt taken from the SKS 8-K filed Jul 6, 2005.

Item 1.01 Entry Into a Material Definitive Agreement

 

As previously disclosed, on June 20, 2005 the Company commenced cash tender offers and consent solicitations for three issues of its outstanding senior notes and consent solicitations with respect to two additional issues of senior notes and the Company’s convertible senior notes. On July 5, 2005, the Company announced that as of July 1, 2005 holders of a majority of all issues of the Company’s senior notes and the convertible senior notes had delivered consents to proposed amendments to the note indentures and the waiver of specified defaults, including the defaults that were the subject of a previously disclosed notice of default received from a hedge fund purporting to own more than 25% of the Company’s convertible senior notes.

 

Accordingly, on July 1, 2005, the Company entered into supplemental indentures (the “Supplemental Indentures”) with the indenture trustee for the convertible senior notes and the two issues of senior notes that were subject to a consent solicitation only. The affected notes are:

 

CUSIP No.


     Outstanding
Principal Amount


    

Title of Security


79377WAL2

     $ 230,000,000      2.00% Convertible Senior Notes due 2024

79377WAK4

               

               

79377 WAG3

     $ 141,557,000      9 7/8% Senior Notes due 2011

79377WAH1

               

               

79377WAA6

     $ 190,324,000      8 ¼% Senior Notes due 2008

 

With respect to those issues of senior notes that were subject to a tender offer as well as a consent solicitation, if the Company accepts tendered senior notes for purchase, the Company intends to enter into a supplemental indenture with the indenture trustee for each such issue of senior notes to effect the proposed amendments to those indentures, and the proposed waiver will become effective with respect to those issues. The Expiration Time for each of the tender offers is midnight on July 18, 2005.

 

The Supplemental Indentures (i) extend to October 31, 2005 the Company’s deadlines, for purposes of the subject indentures, to file its Annual Report on Form 10-K for the fiscal year ended January 29, 2005 and its Quarterly Report on Form 10-Q for the quarterly period ended April 30, 2005, (ii) extend to October 31, 2005 the Company’s deadline to deliver to the trustee under each subject indenture a certificate, otherwise required to have been filed by May 29, 2005, relating to compliance with such indenture, (iii) provide that the Company shall not be required to deliver to the trustee under each subject indenture a notice regarding breaches of certain specified covenants under the relevant indenture that occur prior to October 31, 2005 and (iv) provide that the failure of the Company to comply with the provisions of the subject indentures affected by these amendments prior to October 31, 2005 shall not constitute a default within the meaning of a specified provision of each indenture.

 

This description of the Supplemental Indentures is qualified in its entirety by reference to their complete text. The Supplemental Indentures are filed as Exhibits 4.1, 4.2 and 4.3 to this Current Report on Form 8-K.


Item 8.01. Other Events

 

On July 5, 2005, the Company issued a news release relating to the matters described in Item 1.01 above, as well as other matters relating to its tender offers and consent solicitations with respect to its outstanding notes. A copy of the Company’s July 5, 2005 news release is attached hereto as Exhibit 99.1 and incorporated in this Item 8.01 by reference.

 

This excerpt taken from the SKS 8-K filed Jun 29, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

On June 23, 2005 the Human Resources/Option Committee of the Company’s Board of Directors approved the following awards of performance shares (each an “Award”):

 

Name and Title of

Award Recipient


   Number of Shares Earned
at Threshold Level of
Performance


   Number of Shares Earned
at Target Level of
Performance


   Number of Shares Earned
at Maximum Level of
Performance


R. Brad Martin,

Chief Executive Officer and Chairman of the Board

   24,999    83,333    125,000

Stephen I. Sadove,

Vice Chairman and Chief Operating Officer

   24,999    83,333    125,000

James A. Coggin,

President and Chief Administrative Officer

   12,000    40,000    60,000

Douglas E. Coltharp,

Executive Vice President and Chief Financial Officer

   10,500    35,000    52,500

James S. Scully,

Executive Vice President-Human Resources and Strategic Planning

   7,500    25,000    37,500

Charles J. Hansen,

Executive Vice President and General Counsel

   7,500    25,000    37,500

Kevin G. Wills,

Executive Vice President of Finance and Chief Accounting Officer

   7,500    25,000    37,500

 

Each Award was made pursuant to the Company’s 2004 Long-Term Incentive Plan (the “Plan”) and is subject to the general terms and conditions set forth in a Performance Share Agreement dated June 16, 2004 (June 27, 2005 with respect to Kevin G. Wills) between the Company and the Award recipient and the terms and conditions specifically applicable to the Award set forth in a Supplement to Performance Share Agreement dated June 27, 2005 (together a “Performance Share Agreement”).

 

The performance shares subject to each Award relate to a performance period ending on February 3, 2007, although the shares may vest earlier or be forfeited as provided in the Performance Share Agreement for the Award. Delivery of the shares subject to each Award is subject to the achievement, as determined by the Human Resources/Option Committee of the Board of Directors in accordance with the Plan, of the following performance targets: management of corporate expenses to plan; management of capital expenditures to plan; execution of the Transition Services Agreement to be entered into with Belk, Inc. as part of the previously disclosed sale of the Company’s McRae’s/Proffitt’s assets to Belk, Inc.; completion of the strategic alternatives process for the Company’s Department Store Group (“DSG”) and the receipt of specified levels of gross proceeds in connection with such process; and appreciation in the price of the Company’s common stock ($19-threshold level, $20-target level, and $21-maximum level). Each of these five performance targets is weighted 20%.

 

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A form of Performance Share Agreement used to evidence an Award is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item by reference. The description of the Award in this Item is qualified in its entirety by reference to the full text of the Performance Share Agreement.

 

Also on June 23, 2005 the Human Resources/Option Committee of the Company’s Board of Directors approved for R. Brad Martin, in accordance with his Employment Agreement dated December 8, 2004, an additional award of 40,000 performance shares (the “Stock Bonus Award”). The Stock Bonus Award was made pursuant to the Plan and is subject to the general terms and conditions set forth in a Performance Share Agreement dated June 16, 2004 between the Company and Mr. Martin and the terms and conditions specifically applicable to the Stock Bonus Award set forth in a Supplement to Performance Share Agreement dated June 27, 2005 (together the “Martin Performance Share Agreement”).

 

The performance shares subject to the Stock Bonus Award relate to a performance period ending on January 28, 2006, although the shares may vest earlier or be forfeited as provided in the Martin Performance Share Agreement. Delivery of the shares subject to the Stock Bonus Award is subject to the achievement, as determined by the Human Resources/Option Committee of the Board of Directors in accordance with the Plan, of the following performance targets: achievement of EBIT plan (up to 10,000 shares); execution of value creating strategic alternatives for DSG assets (up to 15,000 shares); completion of Sarbanes-Oxley Section 404 assessment and the taking of appropriate actions with respect thereto (up to 5,000 shares); and the implementation of corporate governance initiatives that enhance shareholder value (up to 10,000 shares). Performance shares earned by Mr. Martin pursuant to the Stock Bonus Award will be forfeited to the extent determined by the Company’s Board of Directors. See the Company’s Current Report on Form 8-K filed on May 12, 2005.

 

The Supplement to Performance Share Agreement dated June 27, 2005 used to evidence the Stock Bonus Award is included as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated into this Item by reference. The description of the Stock Bonus Award in this Item is qualified in its entirety by reference to the full text of the Martin Performance Share Agreement (which is in the form of the Performance Share Agreement included as Exhibit 99.1 and the Supplement to Performance Share Agreement included as Exhibit 99.2).

 

This excerpt taken from the SKS 8-K filed May 18, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

On May 13, 2005 Saks Incorporated (the “Company”) and Kevin Wills, who on that day was appointed as the Company’s Executive Vice President of Finance and Chief Accounting Officer (the “Executive”), entered into an Employment Agreement dated May 13, 2005 (the “Employment Agreement”). See Item 5.02 of this Current Report on Form 8-K.

 

The following is a brief description of the terms and conditions of the Employment Agreement that are material to the Company: (1) the Employment Agreement has no term; (2) base salary of not less than $425,000 per year; (3) the Executive is eligible for a yearly cash bonus, which at the target level is 40% of base salary; (4) the Company’s stock incentive plans will govern the vesting of stock incentive awards if a change in control occurs; (5) the Company will award the Executive 20,000 shares of restricted stock; (6) the Company’s existing retention bonus letter with the Executive is in full force and effect; (7) the Company may terminate the Employment Agreement at any time without cause and the Executive may terminate the Employment Agreement for good reason; (8) “good reason” is defined as (i) a mandatory relocation of the Executive’s principal place of employment from the Birmingham, Alabama area, (ii) a reduction in the Executive’s duties or status in anticipation of, or on or after, a change in control, or (iii) the Executive’s termination of the Executive’s employment at any time following the first anniversary of a change in control; (9) to receive severance benefits the Executive must sign and deliver to the Company a written release in form and substance reasonably satisfactory to the Company; (10) if termination without cause occurs prior to, and not in anticipation of, a change in control the Company will pay the Executive an amount equal to two times the Executive’s base salary; (11) if termination without cause occurs in anticipation of, or on or after, a change of control the Company will pay the Executive an amount equal to three times the Executive’s base salary and Executive’s target bonus potential (prorated to the date of termination); (12) if termination without cause occurs in anticipation of, or on or after, a change in control, the Executive is entitled to participate at the Company’s expense in the Company’s health plans with family coverage for three years from the date of termination; (13) if the Company terminates the Employment Agreement without cause the Executive will be entitled to a severance payment under the Company’s 2000 Change of Control and Material Transaction Severance Plan if that plan provides for a larger severance payment and if the Executive waives the Executive’s rights to a severance payment under the Employment Agreement; (14) if the Executive violates the Employment Agreement’s non-solicitation/non-competition requirements the Company’s obligation to make a severance payment would terminate; (15) if any severance payment would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code then the Company will make a gross up payment to the Executive with respect to such tax; (16) the Company may terminate the Employment Agreement for cause in which event no base salary, bonus, or severance payment will be paid to the Executive following termination; (17) for purposes of the Employment Agreement “cause” means (i) conviction of the Executive, after all applicable rights of appeal have been exhausted or waived, for any crime that materially discredits the Company or is materially detrimental to the reputation or goodwill of the Company; (ii) commission of any material act of fraud or dishonesty by the Executive against the Company or commission of an immoral or unethical act that materially reflects negatively on the Company; or (iii) the Executive’s continual and material breach of the Executive’s obligations under the Agreement to serve the Company diligently, as determined by the Human Resources/Option Committee of the Board of Directors after the Executive has been given written notice of the breach and a reasonable opportunity to cure the breach; (18) the Executive will maintain the confidentiality of the Company’s proprietary and confidential information; (19) for one year following termination the Executive will not engage in specified categories of associations with specified competitors, will not disparage the Company, and will not solicit any employee of the Company to leave that employment; (20) if the Executive brings any action to enforce the Executive’s rights under the Employment Agreement after a change in control, the Company will reimburse the Executive for the Executive’s reasonable costs, including attorney’s fees, incurred; and (21) the Company may assign its obligation under the Employment Agreement to any person, including any purchaser of all or any part of the Company’s business.

 

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On May 13, 2005 the Human Resources/Option Committee of the Company’s Board of Directors approved an award of 20,000 shares of restricted stock to the Executive (the “Award”) pursuant to the Company’s 2004 Long-Term Incentive Plan and subject to the terms and conditions specified in the Restricted Stock Agreement between the Company and the Executive dated May 18, 2005 and the Supplement to Restricted Stock Agreement dated May 18, 2005 (together, the “Restricted Stock Agreement”). The shares of restricted stock subject to the Award will vest as follows: 10,000 shares will vest on May 11, 2007 and 10,000 shares will vest on May 11, 2008, unless the shares vest earlier or are forfeited as provided in the Restricted Stock Agreement. The Restricted Stock Agreement is included as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item by reference. The description of the Award in this Item is qualified in its entirety by reference to the full text of the Restricted Stock Agreement.

 

This excerpt taken from the SKS 8-K filed May 2, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

On April 28, 2005 Saks Incorporated (the “Company”) and Belk, Inc.(“Buyer”) entered into an Asset Purchase Agreement dated as of April 28, 2005 (the “Purchase Agreement”).

 

The following is a brief description of certain of the terms and conditions of the Purchase Agreement: (1) the purchase price is $622,000,000 in cash, subject to adjustment based on changes in working capital; (2) Buyer will purchase substantially all of the assets of the Company and of specific subsidiaries of the Company (the “Subsidiaries”) that are solely related to the business of owning and operating the stores operating under the Company’s “Proffitt’s” and “McRae’s” business names (the “Business”); (3) excluded assets will include without limitation (a) cash (other than “register cash” and “store safe cash”), (b) accounts receivable, (c) four stores located in Alabama and (iv) Club Libby Lu assets; (4) in general, Buyer will assume all liabilities of the Company and the Subsidiaries to the extent solely relating to the Business or the transferred assets; (5) excluded liabilities will include without limitation all pre-closing taxes, specified existing litigation matters and pre-closing medical, workers’ compensation and general liability claims; (6) if a landlord consent with respect to one of the stores to be sold is not obtained prior to closing, this store will be excluded from the sale, and the purchase price will be reduced by an agreed amount, and if the consent is obtained within six months following closing the Company will sell the store to Buyer for the agreed amount; (7) customary representations, warranties and covenants; (8) the Company’s indemnification obligation for breach of representations and warranties (other than authority) will be subject to a $65,000 per claim threshold, a $10,000,000 aggregate deductible, and a $60,000,000 cap; (9) representations and warranties will generally survive for 12 months after closing: (10) the Company will deliver fiscal 2004 audited financial statements of the Business within 60 days after the closing; (11) the closing conditions include expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, no order of any governmental body restraining or prohibiting the purchase and sale of any material portion of the transferred assets, performance by the Company and Buyer in all material respects of all material covenants and agreements required by Purchase Agreement to be performed at or prior to the closing, termination of all liens under the Company’s credit agreement (with respect to the transferred assets) and representations and warranties being true at closing except as would not have a material adverse effect; (12) Buyer will generally offer continued employment to all employees of the Business at a rate of compensation (base salary and bonus potential) that is at least the same as that to which such employees are entitled prior to closing; (13) specified employees of the Business will receive from Buyer at its expense prescribed severance benefits under the Company’s Amended and Restated 2000 Change in Control and Material Transaction Severance Plan as a result of termination of employment following the closing of the transaction contemplated by the Purchase Agreement, and Buyer will pay severance under the Company’s severance guidelines to specified transferred employees whose employment is involuntarily terminated during 2005; (14) prior to closing, Buyer will be obligated to, with respect to the stores being sold, either (a) enter into a program agreement with Household Bank (SB), N.A. (now known as HSBC Bank Nevada, N.A.) that is acknowledged by Household Bank to satisfy the requirements of the Program Agreement between the Company and Household Bank (SB), N.A. dated as of April 15, 2003 or (b) purchase the accounts and account receivables associated with such stores from Household Bank for a specified price; and (15) the Company and Buyer will enter into a transition services agreement, private brands agreement, and Club Libby Lu licensed departments agreement in connection with the transaction.

 

A copy of the Purchase Agreement is attached to, and incorporated by reference in this Item of, this Current Report on Form 8-K as Exhibit 99.1. The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase Agreement.

 

The summary disclosure above and the Purchase Agreement attached as Exhibit 99.1 to this Current Report on Form 8-K are being furnished to provide information regarding the terms and conditions of the Purchase

 

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Agreement. No representation, warranty, covenant, or agreement described in the summary disclosure or contained in the Purchase Agreement is, or should be construed as, a representation or warranty by the Company to any investor or covenant or agreement of the Company with any investor. Investors should note the limitation on third party beneficiary rights contained in the last sentence of Section 13.5(b) of the Purchase Agreement, which provides that nothing in the Purchase Agreement “is intended or shall be construed to confer upon any Person other than the parties and successors and assigns …any right, remedy or claim under or by reason of [the Purchase] Agreement.”

 

There may be risks for investors associated with relying on representations, warranties, covenants, and agreements contained in the Purchase Agreement. The representations and warranties in the Purchase Agreement may be qualified by disclosure schedules that have not been filed with the Securities and Exchange Commission, may be qualified by materiality standards that differ from what may be viewed as material for securities-law purposes, and represent an allocation of risk as between the parties as part of the transaction reflected in the Purchase Agreement. Moreover, the representations and warranties may become incorrect after the date of the Purchase Agreement, and changes, if any, may not be reflected in the Company’s public disclosures. The covenants and agreements contained in the Purchase Agreement are solely for the benefit of the Company and Buyer, and compliance with each covenant and agreement may be waived, and the time for performance under each covenant and agreement may be extended, by the party entitled to the benefit of the covenant or agreement.

 

This excerpt taken from the SKS 8-K filed Apr 25, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

On April 22, 2005 Saks Incorporated (the “Company”) and James S. Scully, the Company’s Executive Vice President–Human Resources and Strategic Planning (the “Executive”), entered into an Employment Agreement dated April 22, 2005 (the “Employment Agreement”).

 

The following is a brief description of the terms and conditions of the Employment Agreement that are material to the Company: (1) The Employment Agreement has no term; (2) base salary of not less than $425,000 per year; (3) the Executive is eligible for a yearly cash bonus, which at the target level is 40% of base salary; (4) the Company’s stock incentive plans will govern the vesting of stock incentive awards if a change in control occurs; (5) the Company may terminate the Employment Agreement at any time without cause and the Executive may terminate the Employment Agreement for good reason after a change in control; (6) “good reason” is defined as (i) a mandatory relocation of the Executive’s principal place of employment from the Birmingham, Alabama area, (ii) a reduction in the Executive’s duties or status, or (iii) the Executive’s termination of the Executive’s employment at any time following the first anniversary of a change in control; (7) to receive severance benefits the Executive must sign and deliver to the Company a written release in form and substance reasonably satisfactory to the Company; (8) if termination without cause occurs prior to, and not in anticipation of, a change in control the Company will pay the Executive an amount equal to two times the Executive’s base salary; (9) if termination without cause occurs in anticipation of, or on or after, a change of control the Company will pay the Executive an amount equal to three times the Executive’s base salary and Executive’s target bonus potential (prorated to the date of termination); (10) if termination without cause occurs in anticipation of, or on or after, a change in control, the Executive is entitled to participate at the Company’s expense in the Company’s health plans with family coverage for three years from the date of termination; (11) if the Company terminates the Employment Agreement without cause the Executive will be entitled to a severance payment under the Company’s 2000 Change of Control and Material Transaction Severance Plan if that plan provides for a larger severance payment and if the Executive waives the Executive’s rights to a severance payment under the Employment Agreement; (12) if the Executive violates the Employment Agreement’s non-solicitation/non-competition requirements the Company’s obligation to make a severance payment would terminate; (13) if any severance payment would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code then the Company will make a gross up payment to the Executive with respect to such tax; (14) the Company may terminate the Employment Agreement for cause in which event no base salary, bonus, or severance payment will be paid to the Executive following termination; (15) for purposes of the Employment Agreement “cause” means (i) conviction of the Executive, after all applicable rights of appeal have been exhausted or waived, for any crime that materially discredits the Company or is materially detrimental to the reputation or goodwill of the Company; (ii) commission of any material act of fraud or dishonesty by the Executive against the Company or commission of an immoral or unethical act that materially reflects negatively on the Company; or (iii) the Executive’s continual and material breach of the Executive’s obligations under the Agreement to serve the Company diligently, as determined by the Human Resources/Option Committee of the Board of Directors after the Executive has been given written notice of the breach and a reasonable opportunity to cure the breach; (16) the Executive will maintain the confidentiality of the Company’s proprietary and confidential information; (17) for one year following termination the Executive will not engage in specified categories of associations with specified competitors, will not disparage the Company, and will not solicit any employee of the Company to leave that employment; (18) if the Executive brings any action to enforce the Executive’s rights under the Employment Agreement after a change in control, the Company will reimburse the Executive for the Executive’s reasonable costs, including attorney’s fees, incurred; and (19) the Company may assign its obligation under the Employment Agreement to any person, including any purchaser of all or any part of the Company’s business.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    SAKS INCORPORATED

Date: April 25, 2005

 

/s/ CHARLES J. HANSEN


   

Executive Vice President and

General Counsel

 

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