8-KMaterial Agreements

Burlington Stores, Inc. 8-K Report, Material Agreement (Mar 19, 2014)

Filed March 19, 2014For Securities:BURL

Summary

Burlington Stores, Inc. (BURL) filed an 8-K on March 19, 2014, reporting an Amended and Restated Stockholders Agreement (the "Amended Agreement") entered into on March 13, 2014. This agreement significantly alters the stock sale restrictions for company managers, particularly those not designated as senior managers. The primary impact for investors is the easing of restrictions on non-senior managers selling their company stock. Previously, these managers could only sell shares proportionally with the Investors (primarily Bain Capital entities). The Amended Agreement introduces a phased release of these restrictions, allowing non-senior managers to sell increasing percentages of their holdings over time, culminating in unlimited sales after one year from the effective date. Senior managers and the Investors remain subject to certain restrictions and rights, including piggyback registration rights for senior managers.

Key Highlights

  • 1Burlington Stores entered into an Amended and Restated Stockholders Agreement on March 13, 2014.
  • 2The Amended Agreement relaxes stock sale restrictions for non-senior managers.
  • 3Non-senior managers will be able to sell up to 25% of their shares from the Effective Date, 50% after six months, 75% after nine months, and without restriction after one year.
  • 4This change is a departure from the prior restriction requiring sales to be proportional to Investor sales.
  • 5Senior managers remain subject to certain sale restrictions and retain piggyback registration rights.
  • 6The Investors (Bain Capital entities) and senior managers are still subject to the original agreement's terms regarding their sales and registration rights.
  • 7The original Stockholders Agreement was set to expire on the earlier of October 7, 2018, or when Investors sold two-thirds of their holdings.

Frequently Asked Questions

The most significant change is the lifting of restrictions on non-senior managers selling their company stock. They will gradually gain the ability to sell a larger portion of their holdings over time, with unlimited sales permitted after one year.

This amendment could lead to an increase in the supply of BURL shares available for public trading as non-senior managers are permitted to sell more of their holdings over the next year. This could potentially impact share price depending on market demand.

Yes, senior managers are treated differently. They remain subject to the previous sale restrictions (in proportion to Investor sales) and retain piggyback registration rights, while non-senior managers are released from these restrictions over time and do not gain new piggyback registration rights.

The key parties are Burlington Stores, Inc., the Investors (primarily Bain Capital Fund IX, L.P. and its affiliates), and the managers of the Company.