UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code:
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Class |
Trading |
Name of Exchange | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Departure of Zachary D. Levenick and Lowell W. Robinson
Effective July 15, 2022, Messrs. Zachary D. Levenick and Lowell W. Robinson notified Barnes & Noble Education, Inc., a Delaware corporation (the “Company”), of their respective resignations as members of the board of directors (the “Board”) of the Company, and from any and all committees of the Board. None of the resignations was because of a disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
Appointment of Rory Wallace
Following receipt of each of Messrs. Levenick’s and Robinson’s respective resignations, and pursuant to that certain Cooperation Agreement, dated as of June 25, 2022 (the “Cooperation Agreement”), by and among the Company and Outerbridge Capital Management, LLC and certain of its affiliates signatory thereto (collectively, “Outerbridge”) previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 27, 2022, the Company appointed Mr. Rory Wallace, Chief Investment Officer of Outerbridge, to the Board effective July 15, 2022. Pursuant to the Cooperation Agreement, the Company also agreed to nominate Mr. Wallace for election to the Board at the 2022 annual meeting of stockholders.
The Board determined that Mr. Wallace qualifies as an “independent director” for purposes of The New York Stock Exchange (“NYSE”) listing standards and for purposes of serving on the Board.
Other than as described herein, the selection of Mr. Wallace to serve as a director of the Company was not pursuant to any arrangement or understanding with any other person. There are no family relationships between Mr. Wallace and any director or executive officer of the Company and there are no transactions between Mr. Wallace and the Company that would be required to be reported under Item 404(a) of Regulation S-K.
Mr. Wallace, 36, serves as the Founder and Managing Member of Outerbridge, an investment adviser to private investment funds for which Mr. Wallace has served as the Chief Investment Officer since December 2014. In his role at Outerbridge, Mr. Wallace conducts significant due diligence on public companies in the technology, media, retail, and education sectors, engaging constructively with both management teams and boards where appropriate. From January 2013 to December 2014, Mr. Wallace was the Founder and Chief Investment Officer of DHC Asset Management, LLC, an investment adviser that focused its investments in technology, media, and retail. Earlier in his career, Mr. Wallace served in various positions at Straus Asset Management LLC, an investment management firm, including as an analyst and then as a Portfolio Manager.
Appointments of Mario Dell’Aera, Denise Warren and Kate Eberle Walker
In addition, on July 15, 2022, following receipt of each of Messrs. Levenick’s and Robinson’s respective resignations, the Board (i) approved an increase in the number of directors constituting the full Board from eight to ten (which number will be decreased to nine following the 2022 annual meeting of stockholders in accordance with the Cooperation Agreement) and (ii) appointed Mr. Mario Dell’Aera, Ms. Denise Warren and Ms. Kate Eberle Walker (together with Mr. Wallace, the “New Directors”) as members of the Board, effective July 15, 2022. Each of Mr. Dell’Aera, Ms. Warren and Ms. Eberle Walker shall serve as a director of the Company until the next annual meeting of stockholders of the Company or until his or her earlier death, resignation or removal.
The Board determined that each of Mr. Dell’Aera, Ms. Warren and Ms. Eberle Walker qualifies as an “independent director” for purposes of the NYSE listing standards and for purposes of serving on the Board.
Mr. Dell’Aera, 63, previously served as Senior Audit Partner and Chief Operating Officer of U.S. Audit Operations at KPMG LLP from 2019 until his retirement in 2021, managing 16 business units encompassing over 9,000 partners and professionals and a $3.0BN operating plan. He brings nearly 40 years of accounting experience serving large, global public and private companies in the information, communications and entertainment industries. From 2012 to 2019, he served as Senior Audit Partner for KPMG’s Financial Services audit practice, comprising banking, capital markets, insurance, asset management and real estate companies. In addition to his deep audit and operational expertise, Mr. Dell’Aera brings a proven track record of leadership, innovation and guiding public companies undergoing strategic transformations and financing transactions.
Ms. Warren, 58, currently serves as the Founder and Chief Executive Officer of Netlyst, LLC a consulting and advisory practice focused on digital business growth and scaling consumer and enterprise recurring revenue streams. She brings extensive public company board experience and has a proven track record growing and operating profitable, recurring revenue businesses in the media and publishing sector, as well as driving transformational digital change in marketing, product and sales. Prior to founding Netlyst, Ms. Warren served as President of Digital and Chief Executive Officer of East Coast Publishing for Tribune Publishing from 2015 to 2016. For more than 25 years, she served in numerous capacities at The New York Times Company inducing as Executive Vice President of Digital Products and Services; General Manager, nytimes.com; Chief Advertising Officer; Senior Vice President of Strategic Planning; and Director of Marketing. Ms. Warren currently serves as an independent Director of Taylor Morrison Home Corporation (NYSE: TMHC), and previously served as a Director and Chair of the Nominating and Governance Committee of Monotype Imaging, and a Director of Electronic Arts (NASDAQ: EA).
Ms. Eberle Walker, 45, currently serves as Chief Executive Officer and Board Chair of Presence Learnings Inc., a provider of special education teletherapy solutions. She brings more than 20 years of experience leading education organizations and an established track record driving value creation through her expertise in human capital management, finance, M&A and strategy development. From 2015 to 2017, she served as Chief Executive Officer of The Princeton Review and Tutor.com, and Chief Financial Officer and Chief Strategy Officer from 2014 to 2015. Ms. Walker began her career in investment banking at Goldman Sachs. She currently serves as a Director of Babbel, Testing Mom and Prospect Schools, and as a Trustee of the International School of Brooklyn. Ms. Walker previously served on the Board of Directors of Rosetta Stone from 2019 until the company’s acquisition by Cambium Learning Group Inc. in 2020.
The selection of each of Mr. Dell’Aera, Ms. Warren and Ms. Eberle Walker to serve as a director of the Company was not pursuant to any arrangement or understanding with any other person. There are no family relationships between any of Mr. Dell’Aera, Ms. Warren and Ms. Eberle Walker and any director or executive officer of the Company and there are no transactions between any of Mr. Dell’Aera, Ms. Warren and Ms. Eberle Walker and the Company that would be required to be reported under Item 404(a) of Regulation S-K.
Audit Committee Appointments
Effective July 15, 2022, Mr. Dan DeMatteo was removed as a member of the Audit Committee of the Board (the “Audit Committee”) and, concurrent with their appointments to the Board, each of Mr. Dell’Aera, Mr. Wallace, Ms. Warren and Ms. Eberle Walker were appointed to serve on the Audit Committee, with Mr. Dell’Aera serving as Chair. The Board determined that each of Mr. Dell’Aera, Mr. Wallace, Ms. Warren and Ms. Eberle Walker qualifies as an “independent director” for purposes of the NYSE listing standards and for purposes of serving on the Audit Committee. The Board also determined that Mr. Dell’Aera qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K.
Compensation Committee Appointments
Effective July 15, 2022 and concurrent with their appointments to the Board, each of Mr. Wallace and Ms. Eberle Walker were appointed to serve on the Compensation Committee of the Board (the “Compensation Committee”). The Board determined that each of Mr. Wallace and Ms. Eberle Walker qualifies as an “independent director” for purposes of the NYSE listing standards and for purposes of serving on the Compensation Committee. In connection with their appointment to the Compensation Committee, the Board also determined that each of Mr. Wallace and Ms. Eberle Walker qualifies as a “non-employee director” for purposes of Rule 16b-3 under the Exchange Act.
Corporate Governance and Nominating Committee Appointments
Effective July 15, 2022, each of Mr. DeMatteo and Ms. Warren were appointed to serve on the Corporate Governance and Nominating Committee of the Board (the “Corporate Governance and Nominating Committee”). The Board determined that each of Mr. DeMatteo and Ms. Warren qualifies as an “independent director” for purposes of the NYSE listing standards and for purposes of serving on the Corporate Governance and Nominating Committee.
New Director Compensation
In connection with their service on the Board, the New Directors are entitled to receive the compensation and equity awards applicable to all of the Company’s non-employee directors. Accordingly, the New Directors are entitled to an annual retainer fee of $85,000, payable in quarterly installments, and equity awards with a target value of $125,000 per year. The New Directors are also eligible to receive incremental annual retainer fees for service on one or more of the Board’s committees. The Company also intends to enter into a standard form of indemnification agreement with each of the New Directors.
Retention Bonus
On July 14, 2022, the Company entered into a retention agreement (each, a “Retention Agreement”) with each of Mr. Thomas D. Donohue, Mr. Michael C. Miller and Mr. Jonathan Shar (collectively, the “Named Executive Officers”) pursuant to which the Company would pay a cash retention bonus to each Named Executive Officer in the following amounts: (i) $300,000 to Mr. Donohue; (ii) $300,000 to Mr. Miller; and (iii) $300,000 to Mr. Shar (collectively, the “Retention Bonuses”). The Retention Bonuses shall be payable as follows: (i) fifty percent (50%) of such Retention Bonus becoming due on December 1, 2022 and (ii) the remaining fifty percent (50%) becoming due on June 1, 2023 (each, a “Retention Date”).
Under each Retention Agreement, the Company is obligated to pay the applicable Retention Bonus in the event that the Company terminates the employment of the applicable Named Executive Officer without “Cause” or if such Named Executive Officer’s employment ends prior to any Retention Date because of “Disability” or for “Good Reason” (each as defined in the applicable Retention Agreement).
The above summary of the Retention Bonuses is qualified in its entirety by reference to the complete terms and conditions as set forth in each applicable Retention Agreement, the form of which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference into this Item 5.02.
| Item 8.01 | Other Events. |
On July 18, 2022, the Company issued a press release announcing, among other things, the appointments of Mr. Dell’Aera, Mr. Wallace, Ms. Warren and Ms. Eberle Walker to the Board. The press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits:
| Exhibit |
Description | |
| 10.1 | Form of Retention Agreement | |
| 99.1 | Press Release, dated July 18, 2022 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
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 thereunto duly authorized.
| Date: July 18, 2022 | ||
| BARNES & NOBLE EDUCATION, INC | ||
| By: | /s/ Michael C. Miller | |
| Name: | Michael C. Miller | |
| Title: | Chief Legal Officer and Executive Vice President, Corporate Development and Affairs | |
Exhibit 10.1
July 14, 2022
Dear [•],
This letter will confirm the Retention Bonus being offered to you and the details regarding the same.
In the event you remain continuously employed by Barnes & Noble College Booksellers, LLC or another subsidiary of Barnes & Noble Education, Inc. (“Company”) through June 1, 2023, Company shall pay you a total retention bonus of $[•] (“Retention Bonus”), less applicable taxes and withholdings, with fifty percent (50%) (or $[•]) of such Retention Bonus becoming due on December 1, 2022 and the remaining fifty percent (50%) becoming due on June 1, 2023 (each a “Retention Date”). The Retention Bonus shall be paid on the payroll date immediately following each respective Retention Date, subject to your continued employment on the applicable Retention Date. Taxes on the Retention Bonus payment shall be solely your responsibility.
You shall not be entitled to the Retention Bonus payment if, prior to any Retention Date, you are terminated for Cause (as defined below) or resign other than for Disability (as defined below) or Good Reason (as defined below). However, if you are terminated without Cause or your employment ends prior to any Retention Date, because of Disability or for Good Reason, you shall be entitled to payment of your entire Retention Bonus (less any amounts already paid, if applicable).
For purposes of this letter, “Cause” means (A) your engaging in intentional misconduct or gross negligence that, in either case, is injurious to Company; (B) your indictment, entry of a plea of nolo contendere, or conviction by a court of competent jurisdiction with respect to any crime or violation of law involving fraud or dishonesty (with the exception of misconduct based in good faith on the advice of professional consultants, such as attorneys and accountants) or any felony (or equivalent crime in a non-U.S. jurisdiction); (C) any gross negligence, intentional acts, or intentional omissions by you as determined by the Company in connection with the performance of your employment duties and responsibilities; (D) fraud, dishonesty, embezzlement, or misappropriation in connection with your performance of your employment duties and responsibilities; (E) your engaging in any act of intentional misconduct or moral turpitude reasonably likely to adversely affect the Company or its business as reasonably determined by the Company; (F) your abuse of or dependency on alcohol or drugs (illicit or otherwise) that adversely affects your job performance; (G) your willful failure or refusal to properly perform (as determined by the Company in its reasonable discretion and judgment) the duties, responsibilities, or obligations of your employment for reasons other than Disability or authorized leave, or to properly perform or follow (as determined by the Company in its reasonable discretion and judgment) any lawful direction by the Company (with the exception of a willful failure or refusal to properly perform based in good faith on the advice of professional consultants, such as attorneys and accountants); or (H) your breach of this letter or any duty to, written policy of, or agreement with the Company (with the exception of a breach based in good faith on the advice of professional consultants, such as attorneys and accountants).
For purposes of this letter, “Good Reason” shall mean the occurrence of one or more of the following events: (A) a material diminution of your duties; (B) a material diminution in the authority, duties, or responsibilities of the supervisor to whom you are required to report; (C) a material reduction in the annual base salary you receive from the Company; or (D) Disability.
Finally, for purposes of this letter, the term “Disability” means you are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months.
Notwithstanding any other provision in this letter, your Retention Bonus is not a guarantee of continued employment with the Company, and you will continue to be an “at-will” employee, which means either you or we can terminate your employment at any time and for any reason, with or without cause.
The terms of your Retention Bonus are to be kept strictly confidential until such time, if at all, such terms are made public by the Company in its sole discretion.
This letter agreement constitutes the entire agreement between you and the Company with respect to the terms of your Retention Bonus and supersedes all prior agreements, understandings, and arrangements, oral or written, between you and the Company with respect to the Retention Bonus. For the avoidance of doubt, this letter agreement does not in any way modify the terms of any other agreements between you and the Company. The terms of this letter agreement may not be amended or modified except by an instrument in writing signed by you and the Company. No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party will be considered a waiver of any other condition or provision or of the same condition or provision at another time. Neither this letter agreement nor any rights or obligations that either party may have by reason of this letter agreement are assignable by you without the prior written consent of the Company. This Agreement may be executed and sent via electronic transmission and in one or more counterparts, each of which shall be deemed an original for all purposes, but all of which together shall constitute one and the same instrument.
If you wish to accept the terms of the Retention Bonus as set forth in this document, please sign below (please retain one copy for your files). If you have any questions, please call Maureen Paradine at (516) 819-0002.
| Very truly yours, |
| Maureen Paradine |
| SVP, Chief HR Officer |
| Barnes & Noble Education |
Agreed and accepted:
| [•] | Date Signed |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Barnes & Noble Education Updates Board of Directors
Three New Independent Directors Appointed as Part of Ongoing Board of Directors Refreshment Effort
Rory Wallace Appointed as Part of Renewed Cooperation Agreement with Outerbridge
BASKING RIDGE, N.J., July 18, 2022 –Barnes & Noble Education, Inc. (NYSE: BNED), a leading solutions provider for the education industry, today announced that it has appointed three new independent directors, Mario Dell’Aera, Jr., Kathryn (“Kate”) Eberle Walker and Denise Warren, to the Company’s Board of Directors (the “Board”), effective immediately. The Company also appointed Rory Wallace, Chief Investment Officer of Outerbridge Capital Management, LLC (“Outerbridge”), to the Board as an independent director as part of its renewed cooperation agreement with Outerbridge. In addition, Lowell W. Robinson and Zachary Levenick have stepped down from the Board, effective immediately.
“The appointments of Mario, Kate and Denise are the culmination of a comprehensive search process and marks significant progress on our commitment to refresh the Board with additional skills, experience and diversity,” said Vice Admiral John R. Ryan, Chairman of the Board, Barnes & Noble Education. “Each of these directors bring significant and highly relevant experience, providing additional financial, operational and industry expertise to enhance the execution of our strategy.”
“On behalf of the Board, I would like to thank Lowell and Zack for their valuable contributions and years of service to the Company,” continued Vice Admiral Ryan. “We have appreciated their insights and contributions throughout their tenure on the Board, especially as we have navigated the challenges of the pandemic over the last two years. We wish them all the best in their future endeavors.”
“We are excited to welcome Mario, Kate, Denise and Rory to the Board,” said Michael P. Huseby, Chief Executive Officer, Barnes & Noble Education. “We believe the addition of these fresh perspectives will help us continue our momentum to drive profitable growth across BNED and extend our leadership in education as we deliver best-in-class solutions for our students, schools and partners and enhance value for our shareholders.”
The Company will present the Board’s recommendation with respect to the election of directors in the Company’s definitive proxy statement and other materials, which will be filed with the U.S. Securities and Exchange Commission and made available to all stockholders eligible to vote at BNED’s 2022 Annual Meeting of Stockholders. Details regarding the 2022 Annual Meeting will be announced in due course.
New Independent Directors
Mario R. Dell’Aera, Jr.
Mario Dell’Aera previously served as Senior Audit Partner and Chief Operating Officer of U.S. Audit Operations at KPMG LLP from 2019 until his retirement in 2021, managing 16 business units encompassing over 9,000 partners and professionals and a $3.0BN operating plan. He brings nearly 40 years of accounting experience serving large, global public and private companies in the information, communications and entertainment industries. From 2012 to 2019, he served as Senior Audit Partner for KPMG’s Financial Services audit practice, comprising banking, capital markets, insurance, asset management and real estate companies. In addition to his deep audit and operational expertise, Mr. Dell’Aera brings a proven track record of leadership, innovation and guiding public companies undergoing strategic transformations and financing transactions.
Kate Eberle Walker
Kate Eberle Walker currently serves as Chief Executive Officer and Board Chair of Presence Learnings Inc., a provider of special education teletherapy solutions. She brings more than 20 years of experience leading education organizations and an established track record driving value creation through her expertise in human capital management, finance, M&A and strategy development. From 2015 to 2017, she served as Chief Executive Officer of The Princeton Review and Tutor.com, and Chief Financial Officer and Chief Strategy Officer from 2014 to 2015. Ms. Walker began her career in investment banking at Goldman Sachs. She currently serves as a Director of Babbel, Testing Mom and Prospect Schools, and as a Trustee of the International School of Brooklyn. Ms. Walker previously served on the Board of Directors of Rosetta Stone from 2019 until the company’s acquisition by Cambium Learning Group Inc. in 2020.
Denise Warren
Denise Warren currently serves as the Founder and Chief Executive Officer of Netlyst, LLC a consulting and advisory practice focused on digital business growth and scaling consumer and enterprise recurring revenue streams. She brings extensive public company board experience and has a proven track record growing and operating profitable, recurring revenue businesses in the media and publishing sector, as well as driving transformational digital change in marketing, product and sales. Prior to founding Netlyst, Ms. Warren served as President of Digital and Chief Executive Officer of East Coast Publishing for Tribune Publishing from 2015 to 2016. For more than 25 years, she served in numerous capacities at The New York Times Company inducing as Executive Vice President of Digital Products and Services; General Manager, nytimes.com; Chief Advertising Officer; Senior Vice President of Strategic Planning; and Director of Marketing. Ms. Warren currently serves as an independent Director of Taylor Morrison Home Corporation (NYSE: TMHC), and previously served as a Director and Chair of the Nominating and Governance Committee of Monotype Imaging, and a Director of Electronic Arts (NASDAQ: EA).
Rory Wallace
Rory Wallace currently serves as the Founder and Chief Investment Officer of Outerbridge Capital Management, LLC, an investment adviser to private investment funds. He brings extensive financial and operational knowledge in the technology, media, retail, and education sectors, and a strong track record of advising public companies on managing the capital markets. Prior to founding Outerbridge, Mr. Wallace served as Founder and Chief Investment Officer of DHC Asset Management, LLC, an investment adviser that focused its investments on technology, media and retail. Earlier in his career, Mr. Wallace served in various positions at Straus Asset Management LLC, an investment management firm, including as an analyst and then as a Portfolio Manager.
ABOUT BARNES & NOBLE EDUCATION, INC.
Barnes & Noble Education, Inc. (NYSE: BNED) is a leading solutions provider for the education industry, driving affordability, access and achievement at hundreds of academic institutions nationwide and ensuring millions of students are equipped for success in the classroom and beyond. Through its family of brands, BNED offers campus retail services and academic solutions, a digital direct-to-student learning ecosystem, unparalleled best-in-class assortment of school apparel through a strategic alliance with Fanatics and Lids, wholesale capabilities and more. BNED is a company serving all who work to elevate their lives through education, supporting students, faculty and institutions as they make tomorrow a better, more inclusive and smarter world. For more information, visit www.bned.com.
Media Contact:
Carolyn J. Brown
Senior Vice President
Corporate Communications & Public Affairs
908-991-2967
cbrown@bned.com
Investor Contact:
Andy Milevoj
Vice President
Corporate Finance and Investor Relations
908-991-2776
amilevoj@bned.com
Document and Entity Information |
Jul. 14, 2022 |
|---|---|
| Cover [Abstract] | |
| Amendment Flag | false |
| Entity Central Index Key | 0001634117 |
| Document Type | 8-K |
| Document Period End Date | Jul. 14, 2022 |
| Entity Registrant Name | BARNES & NOBLE EDUCATION, INC. |
| Entity Incorporation State Country Code | DE |
| Entity File Number | 1-37499 |
| Entity Tax Identification Number | 46-0599018 |
| Entity Address, Address Line One | 120 Mountainview Blvd. |
| Entity Address, City or Town | Basking Ridge |
| Entity Address, State or Province | NJ |
| Entity Address, Postal Zip Code | 07920 |
| City Area Code | (908) |
| Local Phone Number | 991-2665 |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Security 12b Title | Common Stock, $0.01 par value per share |
| Trading Symbol | BNED |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |