Item 1.01. Entry Into a Material Definitive Agreement.
On March 8, 2022, Dollar Tree, Inc. (the "Company" or "Dollar Tree") entered
into a Stewardship Framework Agreement (the "Agreement") with affiliates of
Mantle Ridge LP, an investment fund, which has a combined beneficial ownership
interest in approximately 5.7% of the Company's outstanding shares of common
stock, par value $0.01 per share (the "Common Stock").
The following is a summary of the material terms of the Agreement. This summary
does not purport to be complete and is qualified in its entirety by reference to
the Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report
on Form 8-K and is incorporated herein by reference.
The Company established the position of Executive Chairman, with Richard W.
Dreiling to be appointed as Executive Chairman as of the Board Reconstitution
Time (as defined below).
As of the Board Reconstitution Time, (i) each of Bob Sasser, Arnold S. Barron,
Gregory M. Bridgeford, Lemuel E. Lewis, Carrie A. Wheeler and Thomas E. Whiddon
(the "Retiring Directors") will retire from the Board of Directors of the
Company (the "Board"), (ii) the size of the Board will be increased to 12
directors, (iii) each of Paul C. Hilal (the "MR Director"), Mr. Dreiling, Edward
J. Kelly, III, Cheryl W. Grisé, Daniel J. Heinrich, Mary A. Laschinger, and
Bertram L. Scott (collectively, the "New Directors") will join the Board, with
Messrs. Dreiling, Hilal, and Kelly to serve as Executive Chairman, Vice
Chairman, and Lead Independent Director of the Board, respectively, and (iv) the
Company will subsequently nominate each of the New Directors, as well as Michael
A. Witynski, Thomas W. Dickson, Jeffrey G. Naylor, Winnie Y. Park and Stephanie
P. Stahl (collectively, the "Continuing Directors") (the "2022 Slate") to stand
for election at the 2022 annual meeting of shareholders of the Company (the
"Annual Meeting"). The "Board Reconstitution Time" shall be 12:01 A.M., ET, on
the first business day immediately following the date of the filing of the
Company's Annual Report on Form 10-K for the fiscal year ending January 29, 2022
(the "10-K") with the Securities and Exchange Commission (the "SEC"), and the
Company has agreed to use its reasonable best efforts to file its 10-K by March
15, 2022, or as soon as practicable thereafter, with Mantle Ridge having the
right to effect the Board Reconstitution Time prior to the filing of the Form
10-K if such 10-K is not filed by March 15, 2022.
Pursuant to the Agreement, if the MR Director or a New Director (other than the
MR Director) cannot serve or ceases to serve on the Board during the term of the
Agreement or prior to the Annual Meeting, respectively, the Mantle Ridge Group
will have the right to designate a replacement, subject to certain conditions as
set forth in the Agreement. There are also replacement provisions in the event
that a Continuing Director ceases to serve or stand for election at the 2022
Annual Meeting.
The Agreement also provides for certain amendments of the governing documents of
the Company, including the Amended By-Laws of the Company (the "Bylaws") and the
Corporate Governance Guidelines to address, among other things, the roles of
Executive Chairman, Lead Independent Director and the Vice Chairman.
With respect to the Annual Meeting, the Mantle Ridge Group has agreed to cause
all shares of Common Stock owned by it and its affiliates and which it has the
right to direct the vote to (i) be present for quorum purposes and (ii) be voted
in favor of the 2022 Slate and against the removal of any such director.
Pursuant the Agreement, the Company has also agreed to reconstitute the
leadership and composition of committees of the Board as set forth in the
Agreement, effective as of the Board Reconstitution Time, and to maintain such
leadership at least until immediately prior to the 2023 annual meeting of
stockholders. The Board will create a new Finance Committee and a Sustainability
and Corporate Social Responsibility Committee (the "Sustainability and CSR
Committee"). The Finance Committee is expected to have such responsibilities and
authorities as the Board determines would be appropriate for such a committee.
The Sustainability and CSR Committee is expected to have such responsibilities
and authorities as the Board determines regarding the Company's sustainability
as currently set forth in the charter of the Nominating, Governance and
Sustainability Committee (to be renamed the Nominating and Governance Committee,
effective as of the Board Reconstitution Time) and regarding the Company's human
capital management and workplace environment and culture matters as currently
set forth in the charter of the Compensation Committee.
If the Mantle Ridge Group's economic interests in the Company drop below 5.0% of
the outstanding Common Stock (excluding the effects of any issuance of shares or
similar transaction that increases the number of outstanding shares of Common
Stock) before the Annual Meeting, the MR Director shall tender his resignation.
The Agreement further provides that, except for certain restrictions set forth
in the Company's insider trading policy, none of the restrictions in the
Company's policies applicable to Mr. Hilal or his successor as a director shall
be deemed to apply to the Mantle Ridge Group's transactions in the Company's
securities. The obligations under the Agreement will terminate upon the Mantle
Ridge Group ceasing to have an economic ownership position of at least 2.0% of
the outstanding Common Stock (excluding the effects of any issuance of shares or
similar transaction that increases the number of outstanding shares of Common
Stock), subject to certain specified obligations that will terminate at a later
date.
Upon full effect of the Board Reconstitution Time, the Mantle Ridge Group will
be deemed to have irrevocably withdrawn its previously submitted nomination
notice.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The disclosure in Item 1.01 of this Current Report on Form 8-K is incorporated
herein by reference.
Retirement of Certain Directors
In connection with entry into the Agreement, on March 8, 2022, each of the
Retiring Directors tendered their retirements from the Board (and any Committees
thereof), effective as of the Board Reconstitution Time. None of the Retiring
Directors have retired as a result of any disagreement with the Company on any
matter relating to the Company's operations, policies or practices.
Appointment of Executive Chairman
On March 8, 2022, Mr. Dreiling, age 68, was appointed as Executive Chairman and
as a director of the Company, effective as of the Board Reconstitution Time. Mr.
Dreiling retired in June 2015 from Dollar General Corporation, the nation's
largest small-box discount retailer, as Chief Executive Officer, a position he
held since January 2008. Mr. Dreiling served as Chairman of Dollar General
Corporation from December 2008 until January 2016 and as Senior Advisor from
June 2015 until January 2016. Before joining Dollar General, Mr. Dreiling served
as Chief Executive Officer, President and a director of Duane Reade Holdings,
Inc. and Duane Reade Inc., the largest drugstore chain in New York City, from
November 2005 until January 2008, and as Chairman of Duane Reade from March 2005
until January 2008. Prior to that, Mr. Dreiling, beginning in July 2003, served
as Executive Vice President-Chief Operating Officer of Longs Drug Stores
Corporation, an operator of a chain of retail drug stores on the West Coast and
Hawaii. From 2000 to 2003, Mr. Dreiling served as Executive Vice
President-Marketing, Manufacturing and Distribution at Safeway, Inc., a food and
drug retailer. Prior to that, Mr. Dreiling served from 1998 to 2000 as President
of Vons, a southern California food and drug division of Safeway. Mr. Dreiling
currently is a director at Aramark Corporation, where he serves on the
Compensation and Human Resources Committee and the Nominating, Governance and
Corporate Responsibility Committee; at Kellogg Company, where he serves on the
Audit Committee and the Compensation and Talent Management Committee; at
PulteGroup, Inc., where he chairs the Nominating and Governance Committee and
serves on the Compensation and Management Development Committee; and at Lowe's
Companies, Inc., where he is the Lead Independent Director of the Board of
Directors. Mr. Dreiling is a party to a consulting agreement (the "Consulting
Agreement") and an E&I Agreement (as defined below) with Mantle Ridge, both of
which will terminate upon the Board Reconstitution Time.
Based on information provided to the Company, (i) there are no agreements,
arrangements or understandings between Mr. Dreiling and any other persons, other
than the Consulting Agreement, the E&I Agreement and the Agreement, pursuant to
which he was appointed to the office described above and no family relationships
among any of the Company's directors or executive officers and Mr. Dreiling, and
(ii) Mr. Dreiling does not have any direct or indirect interest in any
transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Promptly following the Board Reconstitution Time, the Company, Mr. Dreiling and
the Board (and the relevant Board committees) will work towards negotiating and
finalizing an agreement with Mr. Dreiling for his service as Executive Chairman.
Appointment of Certain Directors
On March 8, 2022, Mr. Hilal, age 55, was appointed as Vice Chairman of the
Board, effective as of the Board Reconstitution Time. In addition, Mr. Hilal was
appointed as a member of the Compensation Committee, the Finance Committee and
the Nominating, Governance and Sustainability Committee. Mr. Hilal is the
Founder and Chief Executive Officer of Mantle Ridge, and oversees each of its
related entities. Prior to founding Mantle Ridge, Mr. Hilal was a partner and
senior investment professional at Pershing Square Capital Management, where he
worked from 2006 to 2016. From 2012 to 2016, Mr. Hilal served as a director of
Canadian Pacific Railway Limited, where he was Chair of the Management Resources
and Compensation Committee and a member of the Finance Committee. Mr. Hilal
currently serves on the board of Aramark Corporation, where he is Vice Chairman
and serves on the Nominating, Governance and Corporate Responsibility Committee
and the Compensation and Human Resources Committee, and CSX Corporation, where
he is Vice Chairman and a member of the Executive Committee, Finance Committee
and Governance and Corporate Responsibility Committee. Mr. Hilal also currently
serves on the Board of Overseers of Columbia Business School and served until
2016 on the board of the Grameen Foundation, an umbrella organization that helps
micro-lending and micro-franchise institutions empower the world's poorest
through financial inclusion and entrepreneurship. Mr. Hilal graduated from
Harvard College and received his JD from Columbia Law School and his MBA from
Columbia Business School.
Based on information provided to the Company: (i) there are no agreements,
arrangements or understandings between Mr. Hilal and any other persons, other
than the Agreement, pursuant to which he was appointed to the office described
above and no family relationships among any of the Company's directors or
executive officers and Mr. Hilal and (ii) Mr. Hilal does not have any direct or
indirect interest in any transaction required to be disclosed pursuant to Item
404(a) of Regulation S-K.
On March 8, 2022, Ms. Grisé, age 69, was appointed as a director of the Company,
effective as of the Board Reconstitution Time. In addition, Ms. Grisé was
appointed as Chair of the Compensation Committee and as a member of the
Nominating, Governance and Sustainability Committee. Ms. Grisé has broad
executive experience, having held a variety of senior leadership executive roles
throughout her career at Northeast Utilities (a public utility holding company
system), where she worked from 1998 to 2007. Most notably, Ms. Grisé was
President of Northeast Utilities' Utility Group and CEO of its electric and gas
companies. Ms. Grisé is currently a director at ICF International, Inc., where
she serves as chair of the Human Capital Committee and on the Governance and
Nominating Committee; at PulteGroup, Inc., where she serves as chair of the
Nominating and Governance Committee and on the Compensation and Management
Development Committee; and at MetLife, Inc., where she is Lead Director, chair
of the Compensation Committee and the Governance and Corporate Responsibility
Committee, and serves on the Audit Committee.
On March 8, 2022, Mr. Heinrich, age 65, was appointed as a director of the
Company, effective as of the Board Reconstitution Time. In addition, Mr.
Heinrich was appointed as Chair of the Finance Committee and as a member of the
Audit Committee. Mr. Heinrich has extensive executive-level financial knowledge
and experience, having served in numerous senior financial executive roles,
including most recently at The Clorox Company, from which he retired in 2011 and
served as CFO. Before his time at The Clorox Company, Mr. Heinrich was at
Transamerica Finance Corporation, where he worked from 1996 to 2001 and served
as a senior executive and Treasurer. Prior to that, he was, from 1994 to 1996,
Senior Vice President, Treasurer and Controller at Granite Management Company.
Mr. Heinrich began his career as an auditor at Ernst & Young. He is currently a
director at Lowe's Companies, Inc., where he serves on the Compensation
. . .
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On March 8, 2022, the Board approved amendments to the Bylaws effective as of
the Board Reconstitution Time, to, among other things, (i) set forth updated
roles and responsibilities for the positions of Executive Chairman, Vice
Chairman and Lead Independent Director, and (ii) increase the size of the Board
to 12 members.
The above summary does not purport to be complete and is qualified in its
entirety by reference to the Bylaws, a copy of which is filed as Exhibit 3.1 to
this Current Report on Form 8-K and is incorporated herein by reference.
Additional Information
Dollar Tree plans to file a proxy statement and accompanying WHITE proxy card
with the SEC in connection with its solicitation of proxies for the Annual
Meeting. DOLLAR TREE STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE DEFINITIVE
PROXY STATEMENT (AND ANY AMENDMENTS AND SUPPLEMENTS THERETO) AND ACCOMPANYING
WHITE PROXY CARD AND ANY OTHER RELEVANT SOLICITATION MATERIALS WHEN THEY ARE
FILED AS THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders may obtain the
proxy statement, any amendments or supplements to the proxy statement and other
documents as and when filed by Dollar Tree with the SEC without charge from the
SEC's website at www.sec.gov.
Certain Information Regarding Participants
Dollar Tree, its directors and certain of its executive officers may be deemed
to be participants in connection with the solicitation of proxies from Dollar
Tree stockholders in connection with the matters to be considered at the 2022
Annual Meeting. Information regarding the ownership of Dollar Tree's directors
and executive officers in Dollar Tree stock is included in their SEC filings on
Forms 3, 4 and 5, which can be found through the SEC's website at www.sec.gov.
More detailed and updated information regarding the identity of potential
participants, and their direct or indirect interests, by security holdings or
otherwise, will be set forth in the proxy statement to be filed with the SEC.
These documents can be obtained free of charge from the sources indicated above.
Cautionary Statements Regarding Forward-Looking Information
This communication may contain certain "forward-looking statements" as that term
is used in the Private Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by the fact that they address future events,
developments and results and do not relate strictly to historical facts. Any
statements contained herein that are not statements of historical facts may be
deemed to be forward-looking statements. Forward-looking statements include,
without limitation, statements preceded by, followed by or including words such
as "believe," "anticipate," "expect," "intend," "plan," "view," "target" or
"estimate," "may," "will," "should," "predict," "possible," "potential,"
"continue," "strategy," and similar expressions. Although Dollar Tree believes
that the expectations reflected in these forward-looking statements are
reasonable, these statements are not guarantees of future performance and
involve risks and uncertainties, which are subject to change based on various
important factors (some of which are beyond Dollar Tree's control). Moreover,
new risks and uncertainties emerge from time to time and it is not possible for
Dollar Tree to predict all risks and uncertainties that could have an impact on
its forward-looking statements. More detailed information about these factors
may be found in filings made by Dollar Tree with the SEC, including Annual
Reports on Form 10-K and Quarterly Reports on Form 10-Q. Dollar Tree is under no
obligation to, and expressly disclaims any such obligation to, update or alter
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
3.1 Amended and Restated By-Laws of Dollar Tree, Inc.
10.1 Stewardship Framework Agreement, by and between Dollar Tree, Inc. and
MR Cobalt Advisor LLC, on behalf of itself and its affiliates and
associates, dated March 8, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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