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PROXY STATEMENT TABLE OF CONTENTS
TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

ý

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

STAPLES, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

o

 

No fee required.

ý

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        Common Stock, $0.0006 par value per share
 
    (2)   Aggregate number of securities to which transaction applies:
        As of July 17, 2017, 656,712,914 shares of common stock outstanding, 10,876,123 shares of common stock subject to options, 7,397,493 shares of common stock subject to restricted stock units and 3,601,587 shares of common stock subject to performance share awards (at target performance)
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        Solely for purposes of calculating the registration fee, the maximum aggregate value of the transaction was calculated as the sum of (A) 656,712,914 shares of common stock, par value $0.0006 per share, multiplied by $10.25 per share, (B) 7,397,493 shares of common stock subject to restricted stock units multiplied by $10.25 per share and (C) 3,601,587 shares of common stock subject to performance share awards multiplied by $10.25 per share. In accordance with Section 14(g) of the Securities Exchange Act of 1934, as amended, the filing fee was determined by multiplying .0001159 by the maximum aggregate value of the transaction. All outstanding stock options have an exercise price greater than $10.25 and will be canceled, without any consideration being payable in respect thereof.
 
    (4)   Proposed maximum aggregate value of transaction:
        $6,844,047,939
 
    (5)   Total fee paid:
        $793,226
 

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION

[—], 2017

Dear Stockholder:

        We cordially invite you to attend a special meeting of the stockholders of Staples, Inc., a Delaware corporation, which we refer to as "we," "us," "Staples" or the "Company," to be held on [—], 2017 at [—], local time, at the offices of WilmerHale LLP, 60 State Street, Boston, Massachusetts 02109.

        On June 28, 2017, the Company entered into an agreement and plan of merger, as it may be amended from time to time, which we refer to as the merger agreement, with Arch Parent Inc., which we refer to as Parent, and Arch Merger Sub Inc., a wholly-owned subsidiary of Parent, which we refer to as Merger Sub, providing for the merger of Merger Sub with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent. Parent and Merger Sub are beneficially owned by funds managed by Sycamore Partners Management, L.P., which is a private equity firm based in New York specializing in consumer and retail investments.

        At the special meeting, you will be asked to consider and vote on the following matters:

    a proposal to adopt the merger agreement;

    a proposal to approve, on a nonbinding advisory basis, the "golden parachute" compensation that may be payable to our named executive officers in connection with the merger as reported on the Golden Parachute Compensation table on page [—] of the accompanying proxy statement; and

    a proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

        If the merger is consummated, each share of Company common stock issued and outstanding immediately prior to the effective time of the merger will, other than excluded shares (as defined in the accompanying proxy statement), be converted into the right to receive $10.25 in cash, without interest and subject to deduction for any required withholding tax.

        The board of directors of the Company, which we refer to as the Board, has unanimously adopted and approved the merger agreement and recommended that the Company's stockholders vote in favor of the proposal to adopt the merger agreement. The Board made its determination after consultation with its legal and financial advisors and consideration of a number of factors described in the accompanying proxy statement. The Board recommends that you vote "FOR" approval of the proposal to adopt the merger agreement, "FOR" approval of the nonbinding advisory proposal regarding "golden parachute" compensation and "FOR" approval of the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

        Your vote is very important.    The merger cannot be completed unless holders of a majority of the outstanding shares of our common stock entitled to vote at the special meeting vote in favor of the proposal to adopt the merger agreement.

        The accompanying proxy statement provides you with detailed information about the special meeting, the merger agreement and the merger. A copy of the merger agreement is attached as Annex A to the accompanying proxy statement. We encourage you to carefully read the entire proxy statement and its annexes, including the merger agreement. You also may obtain additional information about the Company from documents we have filed with the Securities and Exchange Commission by following the instructions listed in the section of the accompanying proxy statement entitled "Where You Can Find More Information."


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        If you have any questions or need assistance submitting a proxy to have your shares of Company common stock voted at the special meeting, please call D.F. King & Co., Inc., the Company's proxy solicitor, toll-free at (866) 796-7179.

        Thank you in advance for your cooperation and continued support.

Sincerely,

   

Shira Goodman

   

Chief Executive Officer

   

        The accompanying proxy statement is dated [—], 2017 and is first being mailed to our stockholders on or about [—], 2017.

        NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE MERGER, PASSED UPON THE MERITS OR FAIRNESS OF THE MERGER AGREEMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE PROPOSED MERGER, OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

YOUR VOTE IS IMPORTANT. PLEASE SUBMIT YOUR PROXY ELECTRONICALLY VIA THE INTERNET OR TELEPHONICALLY OR BY COMPLETING, SIGNING, DATING AND PROMPTLY RETURNING THE ENCLOSED PROXY CARD, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING. PLEASE DO NOT SEND IN ANY CERTIFICATES FOR YOUR SHARES OF COMPANY COMMON STOCK AT THIS TIME. IF THE MERGER AGREEMENT IS ADOPTED AND THE MERGER IS COMPLETED, YOU WILL RECEIVE A LETTER OF TRANSMITTAL AND RELATED INSTRUCTIONS TO SURRENDER YOUR STOCK CERTIFICATES.


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PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION

        STAPLES, INC.
Five Hundred Staples Drive
Framingham, Massachusetts 01702


NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

Time and Date

  [—], local time, on [—], [—], 2017

Place

 

Offices of WilmerHale LLP
60 State Street
Boston, Massachusetts 02109

Items of Business

 

To consider and vote on:

 

a proposal to adopt the Agreement and Plan of Merger, dated as of June 28, 2017, as it may be amended from time to time, which we refer to as the merger agreement, a copy of which is attached as Annex A to the accompanying proxy statement, by and among Staples, Inc., a Delaware corporation, which we refer to as the Company, Arch Parent Inc., a Delaware corporation, which we refer to as Parent, and Arch Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Parent, which we refer to as Merger Sub;

 

a proposal to approve, on a nonbinding advisory basis, the "golden parachute" compensation that may be payable to our named executive officers in connection with the merger as reported on the Golden Parachute Compensation table on page [—] of the accompanying proxy statement; and

 

a proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Record Date

 

You may vote if you were a stockholder of record at the close of business on [—], 2017.


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Proxy Voting

 

Your vote is very important, regardless of the number of shares of Company common stock you own. The merger and other transactions contemplated by the merger agreement cannot be consummated unless the merger agreement is adopted by the affirmative vote of the holders of a majority of the shares of Company common stock that are issued, outstanding and entitled to vote as of the record date. Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return, as promptly as possible, the enclosed proxy card in the accompanying prepaid reply envelope or submit your proxy by telephone or the Internet prior to the special meeting to ensure that your shares of Company common stock will be represented and voted at the special meeting if you are unable to attend. If you do not attend the special meeting and fail to return your proxy card or fail to submit your proxy by phone or the Internet, your shares of Company common stock will not be counted for purposes of determining whether a quorum is present at the special meeting and will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement.

 

If you are a stockholder of record, voting in person at the special meeting will revoke any proxy previously submitted. If you hold your shares of Company common stock through a bank, brokerage firm or other nominee, you should follow the procedures provided by your bank, brokerage firm or other nominee in order to vote. As a beneficial owner of shares of Company common stock held in "street name," you have the right to direct your bank, brokerage firm or other nominee on how to vote the shares in your account. You are also invited to attend the special meeting. However, because you are not the stockholder of record, you may not vote your shares in person at the special meeting unless you request and obtain a valid proxy from your bank, brokerage firm or other nominee.

Recommendation

 

The board of directors of the Company, which we refer to as the Board, has unanimously adopted and approved the merger agreement and recommended that the Company's stockholders vote in favor of the proposal to adopt the merger agreement. The Board made its determination after consultation with its legal and financial advisors and consideration of a number of factors described in the accompanying proxy statement. The Board recommends that you vote "FOR" approval of the proposal to adopt the merger agreement, "FOR" approval of the nonbinding advisory proposal regarding "golden parachute" compensation and "FOR" approval of the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.


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Attendance

 

Only stockholders of record or their duly authorized proxies or beneficial owners with proof of ownership have the right to attend the special meeting. If your shares of Company common stock are held through a bank, brokerage firm or other nominee, please bring to the special meeting a copy of your brokerage statement evidencing your beneficial ownership of Company common stock. If you are the representative of a corporate or institutional stockholder, you must present proof that you are the representative of such stockholder.

Appraisal Rights

 

Under the General Corporation Law of the State of Delaware, which we refer to as the DGCL, if the merger is completed, holders of Company common stock who do not vote in favor of adoption of the merger agreement and satisfy other conditions set forth in Section 262 of the DGCL will have the right to seek an appraisal by the Delaware Court of Chancery of the fair value of their shares. In order to exercise your appraisal rights, you must submit a written demand for an appraisal of your shares prior to the stockholder vote to adopt the merger agreement (and must not fail to perfect or otherwise effectively withdraw your demand or waive or lose the right to appraisal), you must not vote in favor of adoption of the merger agreement and you must comply with the procedures set forth in Section 262 of the DGCL and explained in the accompanying proxy statement. See "Appraisal Rights" beginning on page [—] and Annex D of the accompanying proxy statement.

        WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PREPAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. IF YOU ATTEND THE SPECIAL MEETING AND VOTE IN PERSON, YOUR VOTE BY BALLOT WILL REVOKE ANY PROXY PREVIOUSLY SUBMITTED.

    By order of the Board of Directors,

 

 

Michael T. Williams
Secretary

[—], 2017
Framingham, Massachusetts


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PROXY STATEMENT
TABLE OF CONTENTS

SUMMARY

  3

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

 
18

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

 
28

THE SPECIAL MEETING

 
29

Time, Place and Purpose of the Special Meeting

 
29

Record Date and Quorum

  29

Attendance

  29

Vote Required

  30

Shares Owned by Our Directors and Executive Officers

  32

Proxies and Revocation

  32

Adjournments and Recesses

  32

Appraisal Rights

  33

Solicitation of Proxies; Payment of Solicitation Expenses

  33

Questions and Additional Information

  33

PARTIES TO THE MERGER

 
34

THE MERGER

 
35

Overview of the Merger

 
35

Directors and Officers of the Surviving Corporation

  35

Background of the Merger

  35

Reasons for the Merger; Recommendation of the Board

  51

Opinions of the Company's Financial Advisors

  56

Company Financial Forecasts; Other Company Information

  68

Financing of the Merger

  74

Limited Guarantee

  77

Closing and Effective Time of the Merger

  78

Payment of Merger Consideration and Surrender of Stock Certificates

  78

Interests of Certain Persons in the Merger

  79

Golden Parachute Compensation

  89

Accounting Treatment

  93

U.S. Federal Income Tax Consequences of the Merger

  93

Regulatory Approvals

  96

THE MERGER AGREEMENT (PROPOSAL ONE)

 
97

Explanatory Note Regarding the Merger Agreement

 
97

The Merger

  97

Closing and Effective Time of the Merger

  98

Marketing Period

  98

Merger Consideration

  99

Payment Procedures

  100

Appraisal Rights

  101

Treatment of Company Stock Awards and Employee Stock Purchase Plan

  102

Representations and Warranties

  103

Definition of Company Material Adverse Effect

  105

Definition of Parent Material Adverse Effect

  106

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Covenants Relating to the Conduct of the Company's Business

  106

Covenants Relating to the Conduct of Parent's and Merger Sub's Business

  109

Restrictions on Solicitation of Other Offers

  109

Restrictions on Changes of Recommendation to Company Stockholders

  111

Additional Agreements of the Parties to the Merger Agreement

  113

Conditions to the Merger

  124

Termination

  125

Termination Fees

  127

Amendment; Extension; Waiver; Procedures

  129

Governing Law; Submission to Jurisdiction

  131

AMENDMENT TO COMPANY BY-LAWS

 
132

NONBINDING ADVISORY PROPOSAL REGARDING "GOLDEN PARACHUTE" COMPENSATION (PROPOSAL TWO)

 
133

AUTHORITY TO ADJOURN THE SPECIAL MEETING (PROPOSAL THREE)

 
134

MARKET PRICE OF COMPANY COMMON STOCK

 
135

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 
136

APPRAISAL RIGHTS

 
138

DELISTING AND DEREGISTRATION OF COMPANY COMMON STOCK

 
143

CONDUCT OF OUR BUSINESS IF THE MERGER IS NOT COMPLETED

 
143

OTHER MATTERS

 
144

Other Matters for Action at the Special Meeting

 
144

Future Stockholder Proposals

  144

WHERE YOU CAN FIND MORE INFORMATION

 
145

ANNEX A—Agreement and Plan of Merger

 
A-1

ANNEX B—Opinion of Barclays Capital Inc. 

 
B-1

ANNEX C—Opinion of Morgan Stanley & Co. LLC

 
C-1

ANNEX D—Section 262 of the General Corporation Law of the State of Delaware

 
D-1

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        We are furnishing this proxy statement to our stockholders as part of the solicitation of proxies by the Company's board of directors, which we refer to as the Board, for use at the special meeting of stockholders described herein. This proxy statement and the enclosed proxy card or voting instruction form are first being mailed on or about [—], 2017 to our stockholders who owned shares of Company common stock as of the close of business on [—], 2017.


SUMMARY

        The following summary highlights selected information in this proxy statement and may not contain all the information that may be important to you. Accordingly, we encourage you to read carefully this entire proxy statement, its annexes and the documents we refer to in this proxy statement. Each item in this summary includes a page reference directing you to a more complete description of that topic. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under "Where You Can Find More Information" beginning on page [].

Parties to the Merger (Page [])

        In this proxy statement, we refer to the agreement and plan of merger, dated as of June 28, 2017, as it may be amended from time to time, among Parent, Merger Sub and the Company, as the merger agreement, and the merger of Merger Sub with and into the Company as the merger. The parties to the merger agreement and the merger are:

    Staples, Inc., which we refer to as "we," "us," "Staples" or the "Company," brings technology and people together in innovative ways to consistently deliver products, services and expertise that elevate and delight customers. Staples is in business with businesses and is passionate about empowering people to become true professionals at work. We pioneered the office products superstore concept by opening the first office products superstore in Brighton, Massachusetts in 1986 to serve the needs of small businesses, and we currently serve businesses of all sizes and consumers primarily in North America, with additional offices in South America and Asia. Shares of Staples common stock are traded on The Nasdaq Global Select Market under the symbol "SPLS." The principal executive offices of Staples are located at Five Hundred Staples Drive, Framingham, Massachusetts 01702, and its telephone number is (508) 253-5000.

    Arch Parent Inc., which we refer to as Parent, is a Delaware corporation that was formed solely for the purpose of entering into the merger agreement and related agreements and consummating the merger and the other transactions contemplated thereby. Parent is an affiliate of funds managed by Sycamore Partners Management, L.P., which we refer to as Sycamore, and has not engaged in any business except for activities incidental to its formation and as contemplated by the merger agreement and the related financing transactions. Upon completion of the merger, the Company will be a wholly-owned subsidiary of Parent. The principal executive offices of Parent are located at 9 West 57th Street, 31st Floor, New York, New York 10019, and its telephone number is (212) 796-8500.

    Arch Merger Sub Inc., which we refer to as Merger Sub, is a Delaware corporation that was formed solely for the purpose of entering into the merger agreement and related agreements and consummating the merger and the other transactions contemplated thereby. Merger Sub is a wholly-owned subsidiary of Parent and has not engaged in any business except for activities incidental to its formation and as contemplated by the merger agreement and the related financing transactions. Upon the completion of the merger, Merger Sub will cease to exist and the Company will continue as the surviving corporation of the merger, which we refer to as the surviving corporation. The principal executive offices of Merger Sub are located at 9 West 57th Street, 31st Floor, New York, New York 10019, and its telephone number is (212) 796-8500.

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The Special Meeting (Page [])

Time, Place and Purpose of the Special Meeting (Page [])

        The special meeting of the stockholders of the Company, which we refer to as the special meeting, will be held on [—], 2017, starting at [—], local time, at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109.

        At the special meeting, holders, which we refer to as stockholders, of common stock of the Company, $0.0006 par value per share, which we refer to as Company common stock, will be asked to consider and vote on:

    a proposal to adopt the merger agreement;

    a proposal to approve, on a nonbinding advisory basis, the "golden parachute" compensation that may be payable to our named executive officers in connection with the merger as reported on the Golden Parachute Compensation table on page [—]; and

    a proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Record Date and Quorum (Page [])

        You are entitled to receive notice of, and to vote at, the special meeting if you owned shares of Company common stock as of the close of business on [—], 2017, which is the date we have set as the record date for the special meeting, and which we refer to as the record date. You will have one vote for each share of Company common stock that you owned on the record date. As of the record date, there were [—] shares of Company common stock outstanding and entitled to vote at the special meeting. A quorum is necessary to transact business at the special meeting, including the adoption of the merger agreement and approval of the nonbinding advisory proposal regarding "golden parachute" compensation. A majority of the shares of Company common stock that are issued, outstanding and entitled to vote at the close of business on the record date, present in person or represented by proxy, at the special meeting constitutes a quorum for the purposes of the special meeting. The Company's amended and restated by-laws, as amended, which we refer to as our by-laws, provide that a special meeting may be adjourned whether or not a quorum is present.

Vote Required (Page [])

        Approval of the proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote thereon as of the record date.

        Under our by-laws, approval of the nonbinding advisory proposal regarding "golden parachute" compensation and approval of the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement, require the affirmative vote of a majority of the votes cast by the holders of all of the shares present or represented at the special meeting and voting on such matters.

Shares Owned by Our Directors and Executive Officers (Page [—])

        As of the record date, the directors and executive officers of the Company beneficially owned and were entitled to vote, in the aggregate, [—] shares of Company common stock, representing [—]% of the outstanding shares of Company common stock on the record date. The directors and executive officers have informed the Company that they currently intend to vote all of their shares of Company

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common stock "FOR" the proposal to adopt the merger agreement, "FOR" approval of the advisory proposal regarding "golden parachute" compensation and "FOR" the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Proxies and Revocation (Page [])

        Any stockholder of record entitled to vote at the special meeting may submit a proxy by telephone, over the Internet, or by returning the enclosed proxy card in the accompanying prepaid reply envelope, or may vote in person by appearing at the special meeting. If your shares of Company common stock are held in "street name" through a bank, brokerage firm or other nominee, you should instruct your bank, brokerage firm or other nominee on how to vote your shares of Company common stock using the instructions provided by your bank, brokerage firm or other nominee. If you hold your shares of Company common stock in "street name," please contact your bank, brokerage firm or other nominee for their instructions on how to vote your shares. Please note that if you are a beneficial owner of shares of Company common stock held in "street name" and wish to vote in person at the special meeting, you must provide a legal proxy from your bank, brokerage firm or other nominee at the special meeting.

        If you fail to submit a proxy or to vote in person at the special meeting, or if you do not provide your bank, brokerage firm or other nominee with voting instructions, your shares of Company common stock will not be voted on the proposal to adopt the merger agreement, which will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement, and your shares of Company common stock will not have an effect on approval of the advisory proposal regarding "golden parachute" compensation or the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

        You have the right to revoke a proxy, whether delivered over the Internet, by telephone or by mail, at any time before it is exercised, by submitting a later-dated proxy through any of the methods available to you, by giving written notice of revocation to our Secretary at Staples, Inc., Five Hundred Staples Drive, Framingham, Massachusetts 01702, which must be filed with the Secretary by the time the special meeting begins, or by attending the special meeting and voting in person. Attendance at the special meeting alone will not revoke your proxy.

The Merger (Page [])

        The merger agreement provides that Merger Sub will merge with and into the Company. The Company will be the surviving corporation in the merger and will continue to do business following the merger. As a result of the merger, the Company will cease to be a publicly traded company. If the merger is consummated, you will not own any shares of the capital stock of the surviving corporation.

Merger Consideration (Page [])

        In the merger, each share of Company common stock, other than as provided below, will be converted into the right to receive $10.25 in cash, without interest and subject to deduction for any required withholding tax. We refer to this consideration per share of Company common stock to be paid in the merger as the merger consideration or the per share merger consideration. The following shares of Company common stock will not be converted into the right to receive the merger consideration in connection with the merger: (a) shares held by any of our stockholders who are entitled to, and who do not, vote in favor of the proposal to adopt the merger agreement and who otherwise properly exercise, and do not withdraw or lose, appraisal rights, which we refer to as the

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dissenting shares, under Section 262 of the General Corporation Law of the State of Delaware, which we refer to as the DGCL, (b) shares held in the treasury of the Company and (c) shares owned by any subsidiary of the Company, Parent, Merger Sub or any other affiliate of Parent. We sometimes refer to the shares described in clauses (b) and (c) in the foregoing sentence, collectively, as the cancelled shares.

Reasons for the Merger; Recommendation of the Board (Page [])

        After careful consideration of various factors described in the section entitled "The Merger—Reasons for the Merger; Recommendation of the Board," the Board, by a unanimous vote of all directors:

    determined and declared that the merger agreement, the merger and the other transactions contemplated thereby, on the terms and subject to the conditions set forth therein, are advisable and in the best interests of the Company and its stockholders;

    adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement;

    declared that the terms of the merger are fair to the Company and the Company's stockholders; and

    determined that it is advisable and in the best interests of the Company for the Board to submit the merger agreement to the Company's stockholders for adoption, directed that the merger agreement be submitted to the Company's stockholders at a special meeting of the Company's stockholders for their adoption, and recommended that the Company's stockholders adopt the merger agreement.

        The Board recommends that you vote "FOR" approval of the proposal to adopt the merger agreement, "FOR" approval of the nonbinding advisory proposal regarding "golden parachute" compensation and "FOR" approval of the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Opinions of the Company's Financial Advisors (Page [—] and Annexes B and C)

        The Company engaged Barclays Capital Inc. and Morgan Stanley & Co. LLC, which we refer to as "Barclays" and "Morgan Stanley", respectively, as financial advisors in connection with the Company's consideration of various matters, including the merger. As part of their respective engagements, each of Morgan Stanley and Barclays rendered to the Board at its meeting on June 28, 2017 an oral opinion, subsequently confirmed by delivery by each of Barclays and Morgan Stanley of a written opinion, dated June 28, 2017, that, as of such date, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by each of Barclays and Morgan Stanley as set forth in its respective written opinion, in the case of Barclays, the merger consideration of $10.25 per share of the Company common stock to be offered to the stockholders of the Company (other than holders of shares held in treasury, or held by any subsidiary of the Company, Parent and Merger Sub or any other affiliate of Parent, or shares as to which dissenters rights have been perfected (collectively, the "excluded shares") in the merger was fair, from a financial point of view, to such stockholders or, in the case of Morgan Stanley, the $10.25 per share merger consideration to be received by the holders of shares of the Company common stock (other than holders of excluded shares) pursuant to the merger agreement was fair, from a financial point of view, to such holders.

        The full text of Barclays' written opinion, dated as of June 28, 2017, which sets forth, among other things, the assumptions made, procedures followed, factors considered and qualifications and limitations upon the review undertaken by Barclays in rendering its opinion, is attached as Annex B to

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this proxy statement. The Company encourages you to read the opinion carefully in its entirety. Barclays' opinion is addressed to the Board, addresses only the fairness, from a financial point of view, of the merger consideration of $10.25 per share of the Company common stock to be offered to the stockholders of the Company, and does not constitute a recommendation to any stockholder of the Company as to how such stockholder should vote with respect to the merger or any other matter. Barclays was not requested to opine as to, and its opinion does not in any manner address, the Company's underlying business decision to proceed with or effect the merger or the likelihood of the consummation of the merger. Barclays' opinion did not address the relative merits of the merger as compared to any other transaction or business strategy in which the Company might engage. The summary of Barclays' opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of Barclays' opinion.

        The full text of the written opinion of Morgan Stanley delivered to the Board, dated June 28, 2017 which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion, is attached as Annex C. The Company stockholders are urged to, and should, read the opinion carefully and in its entirety. Morgan Stanley's opinion is directed to the Board and addresses only the fairness, from a financial point of view, to the Company's stockholders of the $10.25 per share merger consideration to be received by such holders pursuant to the merger agreement as of the date of the opinion. Morgan Stanley's opinion does not address any other aspect of the transactions contemplated by the merger agreement, the relative merits of the merger as compared to any other alternative business transaction, or other alternatives, or whether or not such alternatives could be achieved or are available, and does not constitute a recommendation to the Company's stockholders as to how to vote at the special meeting held in connection with the merger. The summary of Morgan Stanley's opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of Morgan Stanley's opinion.

        For a more complete description, please see the section of this proxy statement entitled "The Merger—Opinions of the Company's Financial Advisors" beginning on page [—].

Financing of the Merger (Page [])

        Parent estimates that the total amount of funds required to complete the merger and related transactions, including to pay fees and expenses in connection with the merger, is approximately $6.9 billion. Parent expects to fund this amount through a combination of:

    cash equity contributions from investment funds managed by Sycamore and Neuberger Berman Private Equity and investment funds affiliated with HarbourVest Partners, which we refer to collectively as the "funds", of up to $1,920 million; and

    debt financing consisting of commitments for (i) a senior secured first lien term loan facility in an aggregate principal amount of $2,400 million, (ii) an asset based revolving credit facility in an aggregate principal amount of $1,200 million, (iii) a senior unsecured bridge facility or senior unsecured notes in an aggregate principal amount of $1,600 million, (iv) an asset based revolving credit facility in an aggregate principal amount of $200 million and (v) an asset based revolving credit facility in an aggregate principal amount of $600 million, on terms and conditions set forth in the debt commitment letter (as defined and described in "The Merger—Financing of the Merger").

        The consummation of the merger is not subject to a financing condition (although the funding of the debt and equity financing is subject to the satisfaction of the conditions set forth in the commitment letters under which the financing will be provided).

        See "The Merger—Financing of the Merger" beginning on page [—] for additional information.

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Limited Guarantee (Page [—])

        On June 28, 2017, investment funds managed by Sycamore and Neuberger Berman Private Equity and investment funds affiliated with HarbourVest Partners, each of which we refer to as a fund, delivered a guarantee, which we refer to as the limited guarantee, pursuant to which each fund has agreed to, severally but not jointly, guarantee the due and punctual performance and discharge of such fund's respective percentage of:

    the obligations of Parent under the merger agreement to pay the Parent termination fee (as defined below in "—Termination Fees") to the Company as and when due; and

    certain expense reimbursement and indemnification obligations of Parent and Merger Sub to the Company as and when due.

        The obligations of each fund under the limited guarantee are subject to an aggregate cap of $345 million based on the applicable fund's pro rata percentage as set forth in the limited guarantee.

        See "The Merger Agreement—Termination Fees" beginning on page [—] and "The Merger Agreement—Expense Reimbursement" beginning on page [—].

Interests of Certain Persons in the Merger (Page [—])

        In considering the recommendation of the Board with respect to the merger agreement, you should be aware that the Company's directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of our stockholders generally, as more fully described below. The Board was aware of these interests and considered them, among other matters, in reaching the determination that the merger and the merger agreement were advisable and in the best interests of the Company and its stockholders and that the terms of the merger were fair to the Company and the Company's stockholders and in making their recommendation regarding the adoption of the merger agreement as described in "The Merger—Reasons for the Merger; Recommendation of the Board" beginning on page [—]. These interests include:

    except as otherwise agreed in writing between the holder and Parent, accelerated vesting of Company restricted stock units held by the Company's directors and executive officers, and cancellation and conversion of each such restricted stock unit into the right to receive a cash payment equal to the merger consideration of $10.25 multiplied by each share of Company common stock underlying such restricted stock unit, on the terms set forth in the merger agreement;

    except as otherwise agreed in writing between the holder and Parent, accelerated vesting of Company performance share awards, and cancellation and conversion of each such performance share award into the right to receive a cash payment equal to the merger consideration of $10.25 multiplied by the target number of shares of Company common stock subject to such performance share award, on the terms set forth in the merger agreement;

    in the event of certain terminations of employment, cash severance payments payable to executive officers of the Company pursuant to severance benefits agreements between the Company and such executive officers and continued health, dental and vision coverage benefits provided to such executive officers pursuant to Company policy;

    cash payments that may be made pursuant to arrangements into which the Company may enter with up to eight individuals to "gross up" such individuals (in whole or in part) for any excise taxes required to be paid by any such individual pursuant to Section 4999 of the Internal Revenue Code of 1986, as amended, which we refer to as the Code (not to exceed $20,704,118 in the aggregate); and

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    continued indemnification and liability insurance for directors and officers following completion of the merger.

        See "The Merger—Interests of Certain Persons in the Merger" beginning on page [—] for additional information.

Approval of "Golden Parachute" Compensation (page [])

        In accordance with Section 14A of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, and Rule 14a-21(c) under the Exchange Act, we are providing stockholders with the opportunity to cast a nonbinding advisory vote with respect to certain payments that may be made to our named executive officers in connection with the merger, or "golden parachute" compensation, as reported on the Golden Parachute Compensation table on page [—]. The Board recommends that you vote "FOR" approval of the nonbinding advisory proposal regarding "golden parachute" compensation.

        Approval of the proposal regarding "golden parachute" compensation requires the approval of a majority of the votes cast on this proposal. Approval of this proposal is not a condition to completion of the merger. The vote with respect to "golden parachute" compensation is an advisory vote and will not be binding on us. Therefore, regardless of whether stockholders approve the "golden parachute" compensation, if the merger agreement is adopted by the stockholders and the merger is completed, the "golden parachute" compensation will still be paid to our named executive officers to the extent payable in accordance with the terms of such compensation.

U.S. Federal Income Tax Consequences of the Merger (Page [])

        The exchange of shares of Company common stock for cash pursuant to the merger will generally be a taxable transaction to U.S. holders and certain non-U.S. holders for U.S. federal income tax purposes. A U.S. holder (or a non-U.S. holder that is subject to U.S. federal income tax on its gain from the merger) who exchanges shares of Company common stock for cash in the merger generally will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received (determined before deduction of any applicable withholding taxes) with respect to such shares and the stockholder's adjusted tax basis in such shares. This may also be a taxable transaction under applicable state, local and/or foreign income or other tax laws. You should read "The MergerU.S. Federal Income Tax Consequences of the Merger" beginning on page [—] for the definition of "U.S. holder" and "non-U.S. holder" and a more detailed discussion of the U.S. federal income tax consequences of the merger. You should also consult your tax advisor for a complete analysis of the effect of the merger on your U.S. federal, state and local and/or foreign taxes.

Regulatory Approvals (Page [])

        The merger is subject to the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Under the terms of the merger agreement, the merger cannot be consummated if any governmental entity of competent jurisdiction has enacted, issued, promulgated, enforced or entered any order, executive order, stay, decree, judgment or injunction (temporary, preliminary or permanent) or statute, rule or regulation which has the effect of making the merger illegal or otherwise prohibiting, restraining, preventing or enjoining consummation of the merger.

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The Merger Agreement (Page [])

Merger Consideration (Page [])

        If the merger is completed, each share of Company common stock, other than the dissenting shares and the cancelled shares will be converted into the right to receive $10.25 in cash, without interest and subject to deduction for any required withholding tax.

Treatment of Company Stock Awards (Page [])

        Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, each then-outstanding and unexercised option to purchase shares of Company common stock with an exercise price per share equal to or greater than the per share merger consideration will be canceled, without any consideration being payable in respect thereof, and will have no further force or effect. Because the current exercise price per share of each outstanding Company stock option is equal to or greater than the per share merger consideration, all Company stock options will be canceled, without payment of any consideration therefor, and will have no further force or effect.

        Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, (i) each Company restricted stock unit that will become vested, by its terms, as a result of the closing of the merger will automatically be canceled and converted into the right to receive from the surviving corporation an amount of cash equal to the product of (A) the total number of shares of Company common stock then underlying such Company restricted stock unit multiplied by (B) the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly after the closing of the merger; and (ii) each Company restricted stock unit that will not be vested, by its terms, on or before the closing of the merger will automatically be canceled and converted into the contingent right to receive from the surviving corporation an amount of cash equal to the product of (A) the total number of shares of Company common stock then underlying such Company restricted stock unit multiplied by (B) the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly following the earlier of (1) the date on which the original vesting conditions applicable to such underlying restricted stock unit, including and taking into account any accelerated vesting provisions set forth therein, are satisfied and (2) the date that is 180 days following the closing, in each case, subject to the holder's continued service with the Company through the applicable date; provided that the 180 day period referenced in clause (2) is extended to the earlier of (x) the last day of the tenth month following the closing and (y) October 31, 2018, for certain Company restricted stock units granted in July 2017.

        Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, (i) each Company performance share award that is then outstanding and unvested and that is held by a former employee of the Company (as determined immediately prior to the effective time of the merger) will automatically be canceled and converted into the right to receive from the surviving corporation an amount of cash equal to the product of the target number of shares of Company common stock subject to such Company performance share award, as pro-rated in accordance with the terms of the applicable Company performance share award agreement, multiplied by the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly after the closing of the merger; and (ii) each Company performance share award that is then outstanding and unvested and that is held by a person who is an employee of the Company immediately prior to the effective time of the merger will automatically be canceled and converted into the contingent right to receive from the surviving corporation an amount of cash equal to the product of the target number of shares of Company common stock subject to such Company performance share award multiplied by the

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per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly following the earlier of (A) the date on which the original vesting conditions applicable to such performance share award, including and taking into account any accelerated vesting provisions set forth therein, are satisfied and (B) the date that is 180 days following the closing, in each case, subject to the holder's continued service with the Company through the applicable date; provided that the merger consideration payable in respect of the Company performance share awards will be paid no later than March 15 of the calendar year following the calendar year in which the closing occurs.

Restrictions on Solicitation of Other Offers (Page []).

        Under the merger agreement, until the earlier of the effective time of the merger and the termination of the merger agreement, the Company and its subsidiaries will not, and the Company will cause its and its subsidiaries' officers and directors not to, and will use reasonable efforts to cause its and its subsidiaries' other representatives not to, directly or indirectly:

    solicit, initiate, knowingly facilitate or knowingly encourage (including by way of providing non-public information) any inquiries or the making of any proposal or offer that constitutes, or that would reasonably be expected to lead to, any acquisition proposal;

    amend or grant a waiver or release, or publicly authorize or agree to enter into an amendment, waiver or release, under (i) any standstill or similar agreement with respect to any Company common stock (other than for Parent or its affiliates) or (ii) any applicable anti-takeover law or anti-takeover provision in the certificate of incorporation or by-laws (other than for Parent or its affiliates), except, in each case, under the circumstances permitted under the merger agreement; or

    enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish or provide access to any non-public information to any person who has made or would reasonably be expected to make any acquisition proposal or otherwise for the purpose of encouraging or facilitating, any acquisition proposal.

        However, subject to compliance with the merger agreement, at any time prior to receipt of the Company stockholder approval the Company may, if the Board determines that failure to take such action would be inconsistent with its fiduciary duties:

    furnish non-public information with respect to the Company and its subsidiaries to any person who has made an acquisition proposal that did not result from a material breach of the merger agreement that the Board determines in good faith (after consultation with outside counsel and its financial advisor) is, or could reasonably be expected to lead to, a superior proposal, which we refer to as a qualified person, pursuant to a confidentiality agreement not materially less restrictive in any substantive manner, including with respect to standstill provisions, than the confidentiality agreement between the Company and Sycamore (and which confidentiality agreement may not include an obligation of the Company to reimburse such person's expenses);

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    engage in discussions or negotiations (including solicitation of revised acquisition proposals) with any qualified person regarding any acquisition proposal; or

    amend, or grant a waiver or release under, any standstill or similar agreement with respect to any Company common stock with any qualified person solely to allow for an acquisition proposal to be made in a confidential manner to the Company or the Board.

        You should read "The Merger Agreement—Restrictions on Solicitation of Other Offers" beginning on page [—] for the definition of "acquisition proposal" and "superior proposal."

Restrictions on Changes of Recommendation to Company Stockholders (Page []).

        Under the merger agreement, the Board must submit the merger agreement to the Company's stockholders for adoption and must recommend that the Company's stockholders vote in favor of adopting the merger agreement. Prior to the earlier of the effective time of the merger and the termination of the merger agreement:

    the Board may not (we refer to each of the actions listed in the following five sub-bullets as a Company board recommendation change):

    withhold, withdraw or modify, or publicly propose to withhold, withdraw or modify, in each case in a manner adverse to Parent, its recommendation to the Company's stockholders that the Company's stockholders adopt the merger agreement at the special meeting, which we refer to as the recommendation;

    fail to include the recommendation in this proxy statement;

    fail to publicly reaffirm the recommendation within five business days of a request therefor in writing by Parent following the public disclosure of an acquisition proposal with any person other than Parent and Merger Sub;

    fail to recommend against any acquisition proposal that is a tender offer or exchange offer within ten business days after the commencement thereof; or

    publicly announce an intention or resolution to effect any of the foregoing;

    the Company and its subsidiaries may not enter into, or publicly authorize or agree to enter into, any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or similar agreement relating to any acquisition proposal (other than a confidentiality agreement entered into in the circumstances described above in the section entitled "—Restrictions on Solicitations of Other Offers");

    the Board may not adopt, approve, endorse or recommend, or publicly propose to adopt, approve, endorse or recommend, any acquisition proposal.

        However, prior to receipt of the Company stockholder approval, the Board may, (i) in response to a superior proposal that did not result from a material breach of the merger agreement, either effect a board recommendation change or cause the Company to terminate the merger agreement, provided that concurrently with or prior to such termination, the Company pays to Parent the company termination fee as required by the merger agreement and, immediately after the termination of the merger agreement, the Company enters into a definitive agreement providing for such superior proposal, or (ii) in response to an intervening event, effect a board recommendation change if, and only if, (in the case of either (i) or (ii)):

    the Board has determined in good faith (after consultation with outside counsel) that the failure to effect a board recommendation change would be reasonably likely to be inconsistent with its fiduciary duties under applicable law;

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    the Company has notified Parent in writing that it intends to effect a board recommendation change or termination of the merger agreement, describing in reasonable detail the reasons for such intended board recommendation change or termination, which we refer to as a recommendation change notice;

    if requested by Parent, the Company will have made itself and its subsidiaries and its and their respective representatives available and the Company will have and will have caused its subsidiaries and its and their respective representatives to discuss and negotiate with Parent's representatives any proposed modifications to the terms and conditions of the merger agreement (in a manner that would obviate the need to effect such board recommendation change) during the four business day period following delivery by the Company to Parent of such recommendation change notice (it being understood that if there are any material amendments, revisions or changes to the terms of any such superior proposal (including any revision to the amount, form or mix of consideration the Company's stockholders would receive as a result of the superior proposal, whether or not material), the Company will notify Parent of each such amendment, revision or change and the applicable four business day period described above will be extended for at least two business days from the date of such notice), which we refer to as a notice period; and

    at the end of such notice period, the Board has determined in good faith (after consultation with outside legal counsel), after considering any modified terms and conditions proposed by or on behalf of Parent, that the failure to effect a board recommendation change would be reasonably likely to be inconsistent with its fiduciary duties under applicable law and, with respect to a board recommendation change in response to a superior proposal, the Board has determined in good faith (after consultation with its financial advisor and outside legal counsel) that such initial or revised (as applicable) superior proposal continues to constitute a superior proposal.

Conditions to the Merger (Page []).

        The obligation of the parties to consummate the merger is subject to the satisfaction or waiver of a number of conditions, including:

    the obtaining of the Company stockholder approval;

    the waiting period (and any extension thereof) applicable to the consummation of the merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or early termination thereof having been granted;

    no governmental entity of competent jurisdiction having enacted, issued, promulgated, enforced or entered any order, executive order, stay, decree, judgment or injunction (temporary, preliminary or permanent) or statute, rule or regulation which is in effect and which has the effect of making the merger illegal or otherwise prohibiting, restraining, preventing or enjoining consummation of the merger;

    each party's respective representations and warranties in the merger agreement shall be true and correct as of the closing date, subject to certain exceptions; and

    each party shall have performed in all material respects its obligations required to be performed by it under the merger agreement at or prior to the effective time of the merger.

Termination (Page [])

        The merger agreement may be terminated and the merger may be abandoned:

    by mutual written consent of Parent and the Company at any time prior to the effective time;

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    by either Parent or the Company, if the effective time of the merger has not occurred on or before December 22, 2017, which we refer to as the outside date, except that a party to the merger agreement will not be permitted to terminate the merger agreement under this provision if the failure of such party to fulfill, in any material respect, any obligation under the merger agreement has been a principal cause of or resulted in the failure of the effective time to occur on or before the outside date, provided that no party will be permitted to terminate the merger agreement during the three business day notice period referenced in the final bullet in this section entitled "—Termination;"

    by either Parent or the Company at any time prior to the effective time if a governmental entity of competent jurisdiction has issued a nonappealable final order, decree, judgment, injunction or ruling or taken any other nonappealable final action, in each case having the effect of permanently restraining, enjoining, preventing or otherwise prohibiting the consummation of the merger, except that a party to the merger agreement will not be permitted to terminate the merger agreement under this provision if the failure of such party to use the standard of efforts required pursuant to the merger agreement to prevent and oppose such order, decree, ruling or the taking of such other action has been a principal cause of or resulted in the issuance of any such order, decree, ruling or the taking of such other action;

    by Parent or the Company if the Company stockholder approval is not obtained at the special meeting or at any adjournment or postponement thereof at which a vote on the adoption of the merger agreement was taken;

    by Parent, prior to the effective time, if the Board has effected a Company board recommendation change;

    by the Company, at any time prior to receipt of the Company stockholder approval, in order to enter into a definitive agreement providing for a superior proposal after complying with the terms and conditions of the provisions described above in the sections entitled "—Restrictions on Solicitation of Other Offers" and "—Restrictions on Changes of Recommendation to Company Stockholders" in all material respects; provided that any purported termination of the merger agreement under this provision will be null and void if the Company does not, prior to or concurrently with the termination of the merger agreement, pay Parent the Company termination fee;

    by Parent, prior to the effective time, if there has been a breach of, inaccuracy in or failure to perform any representation, warranty, covenant or agreement of the Company set forth in the merger agreement, which breach, inaccuracy or failure to perform (i) would cause certain closing conditions applicable to Parent and Merger Sub set forth in the merger agreement not to be satisfied, and (ii) is not capable of being cured by the outside date or, if capable of being cured by the outside date, will not have been cured within 20 business days following receipt by the Company of written notice of such breach, inaccuracy or failure to perform from Parent, provided that neither Parent nor Merger Sub is then in material breach of any representation, warranty or covenant under the merger agreement that would cause certain other closing conditions set forth in the merger agreement not to be satisfied;

    by the Company, prior to the effective time, if there has been a breach of, inaccuracy in or failure to perform any representation, warranty, covenant or agreement of Parent or Merger Sub set forth in the merger agreement, which breach, inaccuracy or failure to perform (i) would cause certain closing conditions applicable to the Company set forth in the merger agreement not to be satisfied, and (ii) is not capable of being cured by the outside date or, if capable of being cured by the outside date, will not have been cured within 20 business days following receipt by Parent of written notice of such breach, inaccuracy or failure to perform from the Company, provided that the Company is not then in material breach of any representation,

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      warranty or covenant under the merger agreement that would cause certain other closing conditions set forth in the merger agreement not to be satisfied; or

    by the Company if:

    the marketing period has ended and the closing conditions applicable to Parent (other than those conditions that by their nature are to be satisfied by actions taken at the closing each of which is capable of being satisfied at the closing) have been and continue to be satisfied;

    the Company has confirmed by written notice to Parent after the end of the marketing period that all closing conditions applicable to the Company have been satisfied (other than those conditions that by their nature are to be satisfied by actions taken at the closing each of which is capable of being satisfied at the closing) or that it irrevocably waives in writing any unsatisfied conditions that may be waived under applicable law; and

    the merger will not have been consummated within three business days after the date on which Parent is required to consummate the merger pursuant to the merger agreement, and at all times during such three business day period, the Company stood ready, willing and able to consummate the merger.

Termination Fees (Page [])

        Subject to certain limitations, the Company will pay Parent a termination fee equal to $171,000,000, which we refer to as the Company termination fee, in the event that the merger agreement is terminated:

    by Parent if the Board has effected a Company board recommendation change;

    by the Company in order to enter into a definitive agreement providing for a superior proposal; or

    (i) by Parent if there has been a breach of, inaccuracy in or failure to perform any representation, warranty, covenant or agreement of the Company set forth in the merger agreement, which breach, inaccuracy or failure to perform would cause certain closing conditions applicable to Parent and Merger Sub set forth in the merger agreement not to be satisfied, and is not capable of being cured by the outside date or, if capable of being cured by the outside date, will not have been cured within 20 business days following receipt by the Company of written notice of such breach, inaccuracy or failure to perform from Parent, (ii) by either Parent or the Company, prior to receipt of the Company stockholder approval, if the effective time of the merger has not occurred on or before the outside date or (iii) by Parent or the Company if the Company stockholder approval is not obtained, if (in each of the preceding clauses (i), (ii) and (iii)):

    before the date of such termination, an acquisition proposal has been publicly announced, made or disclosed and not irrevocably withdrawn without encouragement by or consultation with (excluding arms-length negotiations regarding the terms of the acquisition proposal) the Company or its representatives;

    at the time of the stockholder vote, the debt and equity commitment letters are in full force and effect or have been replaced by alternative financing commitments in corresponding amounts sufficient to consummate the merger; and

    within 12 months after the date of termination, the Company enters into a definitive agreement with respect to any acquisition proposal (which is subsequently consummated) or has consummated any acquisition proposal (provided that, for these purposes, the references

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        to "20%" and "80%" in the definition of "acquisition proposal" are deemed to be references to "50%").

        If either the Company or Parent terminates the merger agreement because the Company stockholder approval is not obtained and at the time of the stockholder vote, the debt and equity commitment letters are in full force and effect or have been replaced with letters providing for alternative financing commitments in a corresponding amount sufficient to consummate the merger, the Company will pay to Parent (within two business days following the delivery by Parent of an invoice therefor) any and all out-of-pocket fees and expenses actually incurred by Parent or on its behalf in connection with or related to the authorization, preparation, investigation, negotiation, execution and performance of the merger agreement and the transactions contemplated by the merger agreement, which we refer to as the Parent expenses, up to a maximum amount of $15,000,000. To the extent a Company termination fee becomes payable, any payment previously made pursuant to the preceding sentence will be credited against the obligation of the Company to pay the Company termination fee.

        Subject to certain limitations, Parent will pay the Company a termination fee equal to $343,000,000, which we refer to as the Parent termination fee, in the event that the merger agreement is terminated:

    by the Company, prior to the effective time, if there has been a breach of, inaccuracy in or failure to perform any representation, warranty, covenant or agreement of Parent or Merger Sub set forth in the merger agreement, which breach, inaccuracy or failure to perform (i) would cause certain closing conditions applicable to the Company set forth in the merger agreement not to be satisfied, and (ii) is not capable of being cured by the outside date or, if capable of being cured by the outside date, will not have been cured within 20 business days following receipt by Parent of written notice of such breach, inaccuracy or failure to perform from the Company; or

    by the Company if:

    the marketing period has ended and the closing conditions applicable to Parent (other than those conditions that by their nature are to be satisfied by actions taken at the closing each of which is capable of being satisfied at the closing) have been and continue to be satisfied;

    the Company has confirmed by written notice to Parent after the end of the marketing period that all closing conditions applicable to the Company have been satisfied (other than those conditions that by their nature are to be satisfied by actions taken at the closing each of which is capable of being satisfied at the closing) or that it irrevocably waives in writing any unsatisfied conditions that may be waived under applicable law;

    the merger has not been consummated within three business days after the date on which Parent is required to consummate the merger pursuant to the merger agreement, and at all times during such three business day period, the Company stood ready, willing and able to consummate the merger.

Market Price of Company Common Stock (Page [])

        The 10-day volume weighted average price per share of the Company's common stock for the period ended April 3, 2017, the last full trading day before widespread media speculation about a potential acquisition of the Company, was $8.58. On July 17, 2017, the closing price for Company common stock on the Nasdaq Stock Market was $10.11 per share of Company common stock. You are encouraged to obtain current market quotations for Company common stock in connection with voting your shares of Company common stock.

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        The Company has historically paid regular quarterly cash dividends on its common stock. The Company most recently paid a cash dividend on July 13, 2017 of $0.12 per share. In connection with the transactions contemplated by the merger agreement, the Company has agreed to suspend the payment of its regular quarterly dividend following payment of the July 13 dividend.

Appraisal Rights (Page [])

        If the merger is completed, record holders of Company common stock as of the record date who submit a written demand for appraisal before the vote is taken on the adoption of the merger agreement, do not fail to perfect or otherwise effectively withdraw their demand or waive or lose the right to appraisal, do not vote in favor of the adoption of the merger agreement, hold their shares of Company common stock continuously through the effective time of the merger and otherwise comply with the procedures set forth in Section 262 of the DGCL may elect to pursue their appraisal rights to receive, in lieu of the $10.25 per share merger consideration, an amount in cash equal to the judicially determined "fair value" of their shares, which fair value will be determined as of the effective time of the merger and could be more or less than, or the same as, the per share merger consideration for the Company common stock. For a summary of the procedures set forth in Section 262 of the DGCL, see "Appraisal Rights" beginning on page [—]. An executed proxy that is not marked "AGAINST" or "ABSTAIN" with respect to the adoption of the merger agreement will be voted "FOR" the adoption of the merger agreement and the stockholder submitting that proxy will lose the right to seek an appraisal of his, her or its shares of Company common stock.

        A copy of Section 262 of the DGCL is included as Annex D to this proxy statement. Failure to follow the procedures set forth in Section 262 of the DGCL will result in the loss of appraisal rights. We encourage you to read these provisions carefully and in their entirety.

        ANY COMPANY STOCKHOLDER WHO WISHES TO EXERCISE APPRAISAL RIGHTS OR WHO WISHES TO PRESERVE HIS, HER OR ITS RIGHT TO DO SO SHOULD REVIEW ANNEX D CAREFULLY AND SHOULD CONSULT HIS, HER OR ITS LEGAL ADVISOR, SINCE FAILURE TO TIMELY AND FULLY COMPLY WITH THE PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF SUCH RIGHTS.

Delisting and Deregistration of Company Common Stock (Page [])

        If the merger is consummated, the Company common stock will be delisted from the Nasdaq Stock Market and deregistered under the Exchange Act. Accordingly, following the consummation of the merger, we would no longer file periodic reports with the Securities and Exchange Commission, or the SEC, on account of the Company common stock.

Conduct of Our Business if the Merger is Not Completed (Page [])

        In the event that the merger agreement is not adopted by our stockholders or if the merger is not completed for any other reason, our stockholders will not receive any consideration from Parent or Merger Sub for their shares of Company common stock. Instead, we would remain an independent public company, our common stock would continue to be listed and traded on the Nasdaq Stock Market and our stockholders would continue to be subject to the same risks and opportunities to which they currently are subject with respect to their ownership of Company common stock. If the merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of our shares, including the risk that the market price of Company common stock may decline to the extent that the current market price of our stock reflects a market assumption that the merger will be completed. If the merger is not completed, our business could be disrupted, including our ability to retain and hire key personnel, potential adverse reactions or changes to our business relationships and uncertainty surrounding our future plans and prospects.

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

        The following questions and answers are intended to address briefly some commonly asked questions regarding the merger, the merger agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a Company stockholder. Please refer to the "Summary" and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to in this proxy statement, which you should read carefully and in their entirety. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions under "Where You Can Find More Information" beginning on page [].

Q.    What is the proposed transaction and what effects will it have on the Company?

A.
The proposed transaction is the acquisition of the Company by Parent pursuant to the merger agreement. If the proposal to adopt the merger agreement is approved by our stockholders and the other closing conditions under the merger agreement are satisfied or waived, Merger Sub will merge with and into the Company, with the Company being the surviving corporation. As a result of the merger, the Company will become a wholly-owned subsidiary of Parent and will no longer be a publicly held corporation, and you will no longer have any interest in our future earnings or growth. In addition, the Company common stock will be delisted from the Nasdaq Stock Market and deregistered under the Exchange Act, and we will no longer file periodic reports with the SEC on account of Company common stock.

Q.    What will I receive if the merger is consummated?

A.
Upon completion of the merger, you will be entitled to receive the per share merger consideration of $10.25 in cash, without interest and subject to deduction for any required withholding tax, for each share of Company common stock that you own, unless you are entitled to and have properly demanded appraisal under Section 262 of the DGCL. For example, if you own 1,000 shares of Company common stock, you will receive $10,250 in cash in exchange for your shares of Company common stock, without interest and subject to deduction for any required withholding tax. You will not receive any shares of the capital stock in the surviving corporation.

Q.    How does the per share merger consideration compare to the market price of Company common stock prior to announcement of the merger?

A.
The merger consideration of $10.25 per share of Company common stock represents an approximately 20% premium to the 10-day volume weighted average price per share of the Company's common stock for the period ended April 3, 2017, the last full trading day before widespread media speculation about a potential acquisition of the Company.

Q.    What will holders of Company stock awards receive if the merger is consummated?

A.
Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, each then-outstanding and unexercised option to purchase shares of Company common stock with an exercise price per share equal to or greater than the per share merger consideration will be canceled, without any consideration being payable in respect thereof, and will have no further force or effect. Because the current exercise price per share of each outstanding Company stock option is equal to or greater than the merger consideration, all Company stock options will be canceled, without payment of any consideration therefor, and will have no further force or effect.


Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, (i) each Company restricted stock unit that

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    will become vested, by its terms, as a result of the closing of the merger will automatically be canceled and converted into the right to receive from the surviving corporation an amount of cash equal to the product of (A) the total number of shares of Company common stock then underlying such Company restricted stock unit multiplied by (B) the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly after the closing of the merger and (ii) each Company restricted stock unit that will not be vested, by its terms, on or before the closing of the merger will automatically be canceled and converted into the contingent right to receive from the surviving corporation an amount of cash equal to the product of (A) the total number of shares of Company common stock then underlying such Company restricted stock unit multiplied by (B) the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly following the earlier of (1) the date on which the original vesting conditions applicable to such underlying restricted stock unit, including and taking into account any accelerated vesting provisions set forth therein, are satisfied and (2) the date that is 180 days following the closing in each case, subject to the holder's continued service with the Company through the applicable date; provided that the 180 day period referenced in clause (2) is extended to the earlier of (x) the last day of the tenth month following closing and (y) October 31, 2018, for certain Company restricted stock units granted in July 2017.


Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, (i) each Company performance share award that is then outstanding and unvested and that is held by a former employee of the Company (as determined immediately prior to the effective time of the merger) will automatically be canceled and converted into the right to receive from the surviving corporation an amount of cash equal to the product of the target number of shares of Company common stock subject to such Company performance share award, as pro-rated in accordance with the terms of the applicable Company performance share award agreement, multiplied by the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly after the closing of the merger and (ii) each Company performance share award that is then outstanding and unvested and that is held by a person who is an employee of the Company immediately prior to the effective time of the merger will automatically be canceled and converted into the contingent right to receive from the surviving corporation an amount of cash equal to the product of the target number of shares of Company common stock subject to such Company performance share award multiplied by the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly following on the earlier of (A) the date on which the original vesting conditions applicable to such performance share award, including and taking into account any accelerated vesting provisions set forth therein, are satisfied and (B) the date that is 180 days following the closing in each case, subject to the holder's continued service with the Company through the applicable date; provided that the merger consideration payable in respect of the Company performance share awards will be paid no later than March 15 of the calendar year following the calendar year in which the closing occurs.

Q.    What will happen to the Company's employee stock purchase plan?

A.
The Board has suspended the Company's employee stock purchase plan indefinitely effective as of July 1, 2017. The Board will terminate the employee stock purchase plan as of immediately prior to the effective time of the merger. During the period from the date of the merger agreement until the termination of the Company's employee stock purchase plan in accordance with the merger agreement, we will not permit any offering periods to occur, and no shares of Company common stock will be issued under the employee stock purchase plan.

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Q.    How does the Board recommend that I vote?

A.
The Board recommends that you vote "FOR" approval of the proposal to adopt the merger agreement, "FOR" approval of the nonbinding advisory proposal regarding "golden parachute" compensation and "FOR" approval of the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Q.    Why is the Board recommending that I vote "FOR" approval of the proposal to adopt the merger agreement?

A.
After careful consideration of various factors described in the section entitled "The Merger—Reasons for the Merger; Recommendation of the Board," the Board, by a unanimous vote of all directors:

determined and declared that the merger agreement, the merger and the other transactions contemplated thereby, on the terms and subject to the conditions set forth therein, are advisable and in the best interests of the Company and its stockholders;

adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement;

declared that the terms of the merger are fair to the Company and the Company's stockholders; and

determined that it is advisable and in the best interests of the Company for the Board to submit the merger agreement to the Company's stockholders for adoption, directed that the merger agreement be submitted to the Company's stockholders at a special meeting of the Company's stockholders for their adoption, and recommended that the Company's stockholders adopt the merger agreement.

Q.    When do you expect the merger to be consummated?

A.
We are working towards completing the merger as soon as possible. Assuming timely satisfaction of necessary closing conditions, including the approval by our stockholders of the proposal to adopt the merger agreement, we currently anticipate that the merger will be consummated no later than December 2017.

Q.    What happens if the merger is not consummated?

A.
If the merger agreement is not adopted by the stockholders of the Company or if the merger is not consummated for any other reason, the stockholders of the Company would not receive any payment for their shares of Company common stock in connection with the merger. Instead, the Company would remain an independent public company, and the Company common stock would continue to be listed and traded on the Nasdaq Stock Market. Under specified circumstances, the Company may be required to pay to Parent a fee with respect to the termination of the merger agreement or certain out-of-pocket fees and expenses incurred by Parent in connection with the authorization, preparation, investigation, negotiation, execution and performance of the merger agreement and the transactions contemplated by the merger agreement, or Parent may be required to pay to the Company a fee with respect to the termination of the merger agreement, as described in the section entitled "The Merger Agreement—Termination Fees" beginning on page [—].

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Q.    Is the merger expected to be taxable to me?

A.
Yes. The exchange of shares of Company common stock for cash pursuant to the merger will generally be a taxable transaction to U.S. holders and certain non-U.S. holders for U.S. federal income tax purposes. A U.S. holder (or a non-U.S. holder that is subject to U.S. federal income tax on its gain from the merger) who exchanges shares of Company common stock for cash in the merger generally will recognize gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received (determined before deduction of any applicable withholding taxes) with respect to such shares and the stockholder's adjusted tax basis in such shares. This may also be a taxable transaction under applicable state, local and/or foreign income or other tax laws. You should read "The Merger—U.S. Federal Income Tax Consequences of the Merger" beginning on page [—] for the definition of "U.S. holder" and "non-U.S. holder" and a more detailed discussion of the U.S. federal income tax consequences of the merger. Because individual circumstances may differ, you should also consult your tax advisor for a complete analysis of the effect of the merger on your U.S. federal, state and local and/or foreign taxes.

Q.    Do any of the Company's directors or officers have interests in the merger that may differ from or be in addition to my interests as a stockholder?

A.
Yes. In considering the recommendation of the Board with respect to the proposal to adopt the merger agreement, you should be aware that our directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of our stockholders generally. The Board was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in recommending that the merger agreement be adopted by the stockholders of the Company. See "The Merger—Interests of Certain Persons in the Merger" beginning on page [—].

Q.    Why am I receiving this proxy statement and proxy card or voting instruction form?

A.
You are receiving this proxy statement and proxy card or voting instruction form in connection with the solicitation of proxies by the Board for use at the special meeting because you owned shares of Company common stock as of the record date for the special meeting. This proxy statement describes matters on which we urge you to vote and is intended to assist you in deciding how to vote your shares of Company common stock with respect to such matters.

Q.    When and where is the special meeting?

A.
The special meeting of stockholders of the Company will be held on [—], 2017 at [—], local time, at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109.

Q.    What am I being asked to vote on at the special meeting?

A.
You are being asked to consider and vote on:

a proposal to adopt the merger agreement;

a proposal to approve, on a nonbinding advisory basis, the "golden parachute" compensation that may be payable to our named executive officers in connection with the merger as reported on the Golden Parachute Compensation table on page [—]; and

a proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

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Q.    What vote is required for the Company's stockholders to approve the proposal to adopt the merger agreement?

A.
The adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote thereon as of the record date.


Because the affirmative vote required to approve the proposal to adopt the merger agreement is based upon the total number of outstanding shares of Company common stock, if you fail to submit a proxy or to vote in person at the special meeting, or if you vote "ABSTAIN," or if you do not provide your bank, brokerage firm or other nominee with voting instructions, it will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement.

Q.    What vote is required for the Company's stockholders to approve the proposal regarding "golden parachute" compensation and the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement?

A.
Approval of the proposals regarding "golden parachute" compensation and adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement, requires the affirmative vote of a majority of the votes cast by the holders of all of the shares present or represented at the special meeting and voting on each of these proposals.


If you vote "ABSTAIN" on the proposal regarding "golden parachute" compensation or the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement, this will have no effect on these proposals. If you fail to submit a proxy or to vote in person at the special meeting, or if you do not provide your bank, brokerage firm or other nominee with voting instructions, your shares of Company common stock will not be voted on these proposals, and thus will have no effect on these proposals.

Q.    Why am I being asked to cast a nonbinding advisory vote to approve "golden parachute" compensation that the Company's named executive officers will receive in connection with the merger?

A.
The SEC's rules require us to seek a nonbinding advisory vote with respect to certain payments that will be made to our named executive officers in connection with the merger, or "golden parachute" compensation.

Q.    What will happen if stockholders do not approve the "golden parachute" compensation at the special meeting?

A.
Approval of "golden parachute" compensation that our named executive officers may receive in connection with the merger is not a condition to completion of the merger. The vote with respect to "golden parachute" compensation is an advisory vote and will not be binding on us. Therefore, regardless of whether stockholders approve the "golden parachute" compensation, if the merger agreement is adopted by the stockholders and the merger is completed, the "golden parachute" compensation will still be paid to our named executive officers to the extent payable in accordance with the terms of such compensation.

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Q.    Who can vote at the special meeting?

A.
All of our holders of Company common stock of record as of the close of business on [—], 2017, the record date for the special meeting, are entitled to receive notice of, and to vote at, the special meeting. Each holder of Company common stock is entitled to cast one vote on each matter properly brought before the special meeting for each share of Company common stock that such holder owned as of the record date.

Q.    What if I am a participant in the Staples' Employees' 401(k) Savings Plan?

A.
If you are a participant in the Staples' Employees' 401(k) Savings Plan, which we refer to as the 401(k) Plan, your proxy will serve as voting instructions for your shares of Company common stock held in the 401(k) Plan as of the record date. Your proxy card covers any shares held in your 401(k) Plan account, as well as any other shares registered in your name as of the record date. If you do not provide voting instructions, the trustee will vote shares allocated to your plan account in the discretion of the 401(k) Plan fiduciary.

Q.    What is a "broker non-vote"?

A.
Under the rules of the Nasdaq Stock Market, banks, brokerage firms or other nominees who hold shares in "street name" for customers have the authority to vote on "discretionary" proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms or other nominees are precluded from exercising their voting discretion with respect to approving non-discretionary matters, such as the proposal to adopt the merger agreement, the proposal to approve the nonbinding advisory proposal regarding "golden parachute" compensation and the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement, and, as a result, absent specific instructions from the beneficial owner of such shares of Company common stock, banks, brokerage firms or other nominees are not empowered to vote those shares of Company common stock on non-discretionary matters, which we refer to generally as "broker non-votes." Because none of the proposals to be voted on at the special meeting are routine matters for which brokers may have discretionary authority to vote, the Company does not expect any broker non-votes at the special meeting.

Q.    What constitutes a quorum for the special meeting?

A.
A quorum is necessary to transact business at the special meeting, including the adoption of the merger agreement and approval of the proposal regarding "golden parachute" compensation. The presence at the special meeting, in person or by proxy, of the holders of a majority of the shares of Company common stock that are issued, outstanding and entitled to vote at the close of business on the record date constitutes a quorum for the purposes of the special meeting. Abstentions and "broker non-votes" (as described below) will be counted as present for the purpose of determining whether a quorum is present. Because none of the proposals to be voted on at the special meeting are routine matters for which brokers may have discretionary authority to vote, the Company does not expect any broker non-votes at the special meeting. The special meeting may be adjourned whether or not a quorum is present.

Q.    How do I vote?

A.
If you are a stockholder of record, you may vote your shares of Company common stock, or have such shares voted, on matters presented at the special meeting in any of the following ways:

in person—you may attend the special meeting and cast your vote there; or

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    by proxy—stockholders of record have a choice of having their shares voted by proxy by submitting a proxy in one of the following ways:

    over the Internet—the website for Internet proxy submission is on your proxy card;

    by using a toll-free telephone number noted on your proxy card; or

    by signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope.


If you hold your shares of Company common stock in "street name," please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you. Please note that if you are a beneficial owner of shares of Company common stock held in "street name" and wish to vote in person at the special meeting, you must provide a legal proxy from your bank, brokerage firm or other nominee at the special meeting.


A control number, located on your proxy card, is designed to verify your identity and allow you to submit a proxy for your shares of Company common stock, and to confirm that your voting instructions have been properly recorded when submitting a proxy over the Internet or by telephone.


If you are a participant in the 401(k) Plan, your proxy will serve as voting instructions for your shares of Company common stock held in the 401(k) Plan as of the record date. Your proxy card covers any shares held in your 401(k) Plan account, as well as any other shares registered in your name as of the record date. If you do not provide voting instructions, the trustee will vote shares allocated to your plan account in the discretion of the 401(k) Plan fiduciary.

Q.    What is the difference between holding shares as a stockholder of record and in "street name"?

A.
If your shares of Company common stock are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares of Company common stock, as the "stockholder of record." This proxy statement, and your proxy card, have been sent directly to you by the Company.


If your shares of Company common stock are held through a bank, brokerage firm or other nominee, you are considered the beneficial owner of shares of Company common stock held in "street name." In that case, this proxy statement has been forwarded to you by your bank, brokerage firm or other nominee who is considered, with respect to those shares of Company common stock, the stockholder of record. As the beneficial owner of shares of Company common stock held in "street name," you have the right to direct your bank, brokerage firm or other nominee how to vote your shares of Company common stock by following their instructions for voting.

Q.    If my shares of Company common stock are held in "street name" by my bank, brokerage firm or other nominee, will my bank, brokerage firm or other nominee vote my shares of Company common stock for me?

A.
Your bank, brokerage firm or other nominee will only be permitted to vote your shares of Company common stock if you instruct your bank, brokerage firm or other nominee how to vote. You should follow the procedures provided by your bank, brokerage firm or other nominee regarding the voting of your shares of Company common stock. If you do not instruct your bank, brokerage firm or other nominee to vote your shares of Company common stock, your shares of Company common stock will not be voted and the effect will be the same as a vote "AGAINST" the proposal to adopt the merger agreement and your shares of Company common stock will not have an effect on approval of the advisory proposal regarding "golden parachute" compensation or

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    the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Q.    How can I change or revoke my proxy?

A.
You have the right to revoke a proxy, whether delivered over the Internet, by telephone or by mail, at any time before it is exercised, by submitting a later-dated proxy through any of the methods available to you, by giving written notice of revocation to our Secretary at Staples, Inc., Five Hundred Staples Drive, Framingham, Massachusetts 01702, which must be filed with the Secretary by the time the special meeting begins, or by attending the special meeting and voting in person. Attendance at the special meeting alone will not revoke your proxy.

Q.    What is a proxy?

A.
A proxy is your legal designation of another person, referred to as a "proxy," to vote your shares of Company common stock. The written document describing the matters to be considered and voted on at the special meeting is called a "proxy statement." The document used to designate a proxy to vote your shares of Company common stock is called a "proxy card." The Board has designated Shira Goodman, Christine Komola and Michael Williams, and each of them singly, with full power of substitution, as proxies for the special meeting.

Q.    If a stockholder gives a proxy, how will its shares of Company common stock be voted?

A.
Regardless of the method you choose to submit your proxy, the individuals named on the enclosed proxy card, as your proxies, will vote your shares of Company common stock in the way that you indicate. When completing the Internet or telephone proxy processes or the enclosed proxy card, you may specify whether your shares of Company common stock should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the special meeting.


If you properly sign your proxy card but do not mark the boxes showing how your shares of Company common stock should be voted on a matter, the shares represented by your properly signed proxy will be voted "FOR" the proposal to adopt the merger agreement, "FOR" approval of the nonbinding advisory proposal regarding "golden parachute" compensation and "FOR" the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Q.    How are votes counted?

A.
With respect to the proposal to adopt the merger agreement, you may vote "FOR," "AGAINST" or "ABSTAIN." Abstentions and broker non-votes will have the same effect as votes "AGAINST" the proposal to adopt the merger agreement.


With respect to the proposal regarding "golden parachute" compensation and the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement, you may vote "FOR," "AGAINST" or "ABSTAIN." Abstentions and broker non-votes will have no effect on these proposals.

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Q.    What do I do if I receive more than one proxy or set of voting instructions?

A.
If you hold shares of Company common stock in more than one account, you may receive more than one proxy or set of voting instructions relating to the special meeting. These should each be voted or returned separately in accordance with the instructions provided in this proxy statement in order to ensure that all of your shares of Company common stock are voted.

Q.    What happens if I sell my shares of Company common stock before the special meeting?

A.
The record date for stockholders entitled to vote at the special meeting is earlier than both the date of the special meeting and the consummation of the merger. If you transfer your shares of Company common stock after the record date but before the special meeting, unless special arrangements (such as provision of a proxy) are made between you and the person to whom you transfer your shares and each of you notifies the Company in writing of such special arrangements, you will retain your right to vote such shares at the special meeting but will transfer the right to receive the per share merger consideration to the person to whom you transfer your shares. You will also lose the ability to exercise appraisal rights with respect to such shares in connection with the merger.

Q.    Who will solicit and pay the cost of soliciting proxies?

A.
The Company will pay all expenses of filing, printing and mailing this proxy statement, including solicitation expenses. The Company has engaged D.F. King & Co., Inc. ("D.F. King") to assist in the solicitation of proxies for the special meeting. The Company estimates that it will pay D.F. King a fee of approximately $17,500. The Company will also reimburse D.F. King for reasonable out-of-pocket expenses and will indemnify D.F. King and its affiliates against certain claims, expenses, losses, damages, liabilities and judgments. The Company may also reimburse brokers, banks and other custodians, nominees and fiduciaries representing beneficial owners of shares of Company common stock for their expenses in forwarding soliciting materials to beneficial owners of Company common stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Q.    What do I need to do now?

A.
Even if you plan to attend the special meeting, after carefully reading and considering the information contained in this proxy statement, please submit your proxy promptly to ensure that your shares are represented at the special meeting. If you hold your shares of Company common stock in your own name as the stockholder of record, please submit a proxy for your shares of Company common stock by (a) completing, signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope, (b) using the telephone number printed on your proxy card or (c) using the Internet proxy instructions printed on your proxy card. If you decide to attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you are a beneficial owner of shares of Company common stock held in "street name," please refer to the instructions provided by your bank, brokerage firm or other nominee to see which of the above choices are available to you.

Q.    Should I send in my stock certificates now?

A.
No. A letter of transmittal will be mailed to you promptly, and in any event within five business days, after the effective time of the merger, describing how you should surrender your shares of Company common stock for the per share merger consideration. If your shares of Company common stock are held in "street name" by your bank, brokerage firm or other nominee, you will

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    receive instructions from your bank, brokerage firm or other nominee as to how to effect the surrender of your "street name" shares of Company common stock in exchange for the per share merger consideration. Please do NOT return your stock certificate(s) with your proxy.

Q.    What should I do if I have lost my stock certificate?

A.
If you have lost your stock certificate, please contact our transfer agent, Computershare Trust Company, N.A., at (888) 875-9002, to obtain replacement certificates.

Q.    What rights do I have if I oppose the merger?

A.
Stockholders of record as of the record date are entitled to exercise appraisal rights under the DGCL only if they do not vote for the adoption of the merger agreement and otherwise follow the procedures and satisfying the requirements specified in Section 262 of the DGCL. A copy of Section 262 of the DGCL is attached as Annex D to this proxy statement. See "Appraisal Rights" beginning on page [—].

Q.    Are there any other risks to me from the merger that I should consider?

A.
Yes. There are risks associated with all business combinations, including the merger. See "Cautionary Statement Concerning Forward-Looking Information" beginning on page [—].

Q.    Who can help answer my other questions?

A.
If you have additional questions about the merger, need assistance in submitting your proxy or voting your shares of Company common stock, or need additional copies of this proxy statement or the enclosed proxy card, please call D.F. King, our proxy solicitor, toll-free at (866) 796-7179.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

        Statements in this proxy statement regarding the proposed transaction between Parent and the Company, the expected timetable for completing the transaction, future financial and operating results, future opportunities for the combined company and any other statements about Parent and the Company managements' future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "anticipates," "expects," estimates and similar expressions) should also be considered to be forward looking statements, although not all forward-looking statements contain these identifying words. Readers should not place undue reliance on these forward-looking statements. The Company's actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which the Company may not be able to predict and may not be within the Company's control. Factors that could cause such differences include, but are not limited to, (i) the risk that the proposed merger may not be completed in a timely manner, or at all, which may adversely affect the Company's business and the price of its common stock, (ii) the failure to satisfy all of the closing conditions of the proposed merger, including the adoption of the merger agreement by the Company's stockholders and the receipt of certain governmental and regulatory approvals in the U.S. and in foreign jurisdictions, (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement, (iv) the effect of the announcement or pendency of the proposed merger on the Company's business, operating results, and relationships with customers, suppliers, competitors and others, (v) risks that the proposed merger may disrupt the Company's current plans and business operations, (vi) potential difficulties retaining employees as a result of the proposed merger, (vii) risks related to the diverting of management's attention from the Company's ongoing business operations, and (viii) the outcome of any legal proceedings that may be instituted against the Company related to the merger agreement or the proposed merger. There are a number of important, additional factors that could cause actual results or events to differ materially from those indicated by such forward looking statements, including the factors described in the Company's Annual Report on Form 10-K for the year ended January 28, 2017 and its most recent quarterly report filed with the SEC. The Company disclaims any intention or obligation to update any forward looking statements as a result of developments occurring after the date of this filing.

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THE SPECIAL MEETING

Time, Place and Purpose of the Special Meeting

        This proxy statement is being furnished to our stockholders as part of the solicitation of proxies by the Board for use at the special meeting to be held on [—], 2017, starting at [—], local time, at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109, or at any adjournment or postponement thereof. At the special meeting, holders of Company common stock will be asked to approve the proposal to adopt the merger agreement, to approve the nonbinding advisory proposal regarding "golden parachute" compensation and to approve the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

        Our stockholders must approve the proposal to adopt the merger agreement in order for the merger to be consummated. If our stockholders fail to approve the proposal to adopt the merger agreement, the merger will not be consummated. A copy of the merger agreement is attached as Annex A to this proxy statement, which we encourage you to read carefully in its entirety.

Record Date and Quorum

        We have fixed the close of business on [—], 2017 as the record date for the special meeting, and only holders of record of Company common stock on the record date are entitled to vote at the special meeting. You are entitled to receive notice of, and to vote at, the special meeting if you owned shares of Company common stock at the close of business on the record date. On the record date, there were [—] shares of Company common stock outstanding and entitled to vote. Each share of Company common stock entitles its holder to one vote on all matters properly coming before the special meeting.

        A majority of the shares of Company common stock that are issued, outstanding and entitled to vote at the close of business on the record date, present in person or represented by proxy, at the special meeting constitutes a quorum for the purposes of the special meeting. Shares of Company common stock represented at the special meeting but not voted, including shares of Company common stock for which a stockholder directs voting "ABSTAIN", as well as broker non-votes (described below), will be counted for purposes of establishing a quorum. Because none of the proposals to be voted on at the special meeting are routine matters for which brokers may have discretionary authority to vote, the Company does not expect any broker non-votes at the special meeting. A quorum is necessary to transact business at the special meeting, including the adoption of the merger agreement and approval of the proposal regarding "golden parachute" compensation. The special meeting may be adjourned whether or not a quorum is present. Once a share of Company common stock is represented at the special meeting, it will be counted for the purpose of determining a quorum at the special meeting and any recess or adjournment of the special meeting. However, if a new record date is set for the adjourned special meeting, then a new quorum will have to be established. In the event that a quorum is not present at the special meeting, it is expected that the special meeting will be adjourned or recessed.

Attendance

        Only stockholders of record or their duly authorized proxies or beneficial owners with proof of ownership have the right to attend the special meeting. If your shares of Company common stock are held through a bank, brokerage firm or other nominee, please bring to the special meeting a copy of your brokerage statement evidencing your beneficial ownership of Company common stock. If you are the representative of a corporate or institutional stockholder, you must present proof that you are the representative of such stockholder.

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Vote Required

        Approval of the proposal to adopt the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote thereon as of the record date. For the proposal to adopt the merger agreement, you may vote "FOR," "AGAINST" or "ABSTAIN." Voting "ABSTAIN" will not be counted as a vote cast in favor of the proposal to adopt the merger agreement but will count for the purpose of determining whether a quorum is present. If you fail to submit a proxy or to vote in person at the special meeting, or if you vote "ABSTAIN," it will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement.

        If your shares of Company common stock are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered, with respect to those shares of Company common stock, the "stockholder of record." This proxy statement and proxy card have been sent directly to you by the Company.

        If your shares of Company common stock are held through a bank, brokerage firm or other nominee, you are considered the beneficial owner of shares of Company common stock held in "street name." In that case, this proxy statement has been forwarded to you by your bank, brokerage firm or other nominee who is considered, with respect to those shares of Company common stock, the stockholder of record. As the beneficial owner of shares of Company common stock held in "street name," you have the right to direct your bank, brokerage firm or other nominee how to vote your shares by following their instructions for voting. If you hold your shares of Company common stock in "street name," please contact your bank, brokerage firm or other nominee for their instructions on how to vote your shares. Please note that if you are a beneficial owner of shares of Company common stock held in "street name" and wish to vote in person at the special meeting, you must provide a legal proxy from your bank, brokerage firm or other nominee at the special meeting.

        Under the rules of the Nasdaq Stock Market, banks, brokerage firms or other nominees who hold shares in "street name" for customers have the authority to vote on "discretionary" proposals when they have not received instructions from beneficial owners. However, banks, brokerage firms or other nominees are precluded from exercising their voting discretion with respect to approving non-discretionary matters, such as the proposal to adopt the merger agreement, the proposal to approve the nonbinding advisory proposal regarding "golden parachute" compensation and the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement, and, as a result, absent specific instructions from the beneficial owner of such shares of Company common stock, banks, brokerage firms or other nominees are not empowered to vote those shares of Company common stock on non-discretionary matters. Shares held by banks, brokerage firms or nominees that are present in person or by proxy at the special meeting but with respect to which the broker or other stockholder of record is not instructed by the beneficial owner of such shares how to vote on a particular proposal and the broker does not have discretionary voting power on such proposal are referred generally as "broker non-votes." These broker non-votes will be counted for purposes of determining a quorum, but will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement. Because none of the proposals to be voted on at the special meeting are routine matters for which brokers may have discretionary authority to vote, the Company does not expect any broker non-votes at the special meeting.

        Approval of the advisory proposal regarding "golden parachute" compensation and approval of the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement, require a majority of the votes cast on each of these proposals. For the nonbinding advisory proposal regarding "golden parachute" compensation and the

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proposal to approve one or more adjournments of the special meeting, if necessary or appropriate if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement, you may vote "FOR," "AGAINST" or "ABSTAIN." For purposes of each of these proposals, if you fail to submit a proxy or to vote in person at the special meeting, or if you have given a proxy and vote "ABSTAIN," the shares of Company common stock will not be counted in respect of, and will not have any effect on, the proposal.

        If you are a stockholder of record, you may vote your shares of Company common stock, or have such shares voted, on matters presented at the special meeting in any of the following ways:

    in person—you may attend the special meeting and cast your vote there; or

    by proxy—stockholders of record have a choice of having their shares voted by proxy by submitting a proxy in one of the following ways:

    over the Internet—the website for Internet proxy submission is on your proxy card;

    by using a toll-free telephone number noted on your proxy card; or

    by signing, dating and returning the enclosed proxy card in the accompanying prepaid reply envelope.

        If you are a beneficial owner of Company common stock held in "street name," you will receive instructions from your bank, brokerage firm or other nominee that you must follow in order to have your shares of Company common stock voted. Those instructions will identify which of the above choices are available to you in order to have your shares voted. Please note that if you are a beneficial owner of Company common stock held in "street name" and wish to vote in person at the special meeting, you must provide a legal proxy from your bank, brokerage firm or other nominee.

        A control number, located on your proxy card, is designed to verify your identity and allow you to submit a proxy for your shares of Company common stock, and to confirm that your voting instructions have been properly recorded when submitting a proxy over the Internet or by telephone.

        Please refer to the instructions on your proxy or voting instruction card to determine the deadlines for submitting a proxy over the Internet or by telephone. If you choose to submit your proxy by mailing a proxy card, your proxy card must be received by our Secretary by the time the special meeting begins. Please do not send in your stock certificates with your proxy card. Following the consummation of the merger, a separate letter of transmittal will be mailed to you that will enable you to surrender your stock certificates and receive the per share merger consideration.

        If you vote by proxy, regardless of the method you choose to submit a proxy, the individuals named as your proxies on the enclosed proxy card, and each of them, with full power of substitution, will vote your shares of Company common stock in the way that you indicate. When completing the Internet or telephone proxy processes or the enclosed proxy card, you may specify whether your shares of Company common stock should be voted for or against or to abstain from voting on all, some or none of the specific items of business to come before the special meeting.

        If you properly sign your proxy card but do not mark the boxes showing how your shares of Company common stock should be voted on a matter, the shares of Company common stock represented by your properly signed proxy will be voted "FOR" the proposal to adopt the merger agreement, "FOR" approval of the nonbinding advisory proposal regarding "golden parachute" compensation and "FOR" the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

        If you have any questions or need assistance voting your shares, please call D.F. King, our proxy solicitor, toll-free at (866) 796-7179.

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        IT IS IMPORTANT THAT YOU SUBMIT A PROXY FOR YOUR SHARES OF COMPANY COMMON STOCK PROMPTLY, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING. PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY CARD IN THE ACCOMPANYING PREPAID REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. STOCKHOLDERS WHO ATTEND THE SPECIAL MEETING MAY REVOKE THEIR PROXIES BY VOTING IN PERSON.

Shares Owned by Our Directors and Executive Officers

        As of the record date, the directors and executive officers of the Company beneficially owned and were entitled to vote, in the aggregate, [—] shares of Company common stock, representing [—]% of the outstanding shares of Company common stock on the record date. The directors and executive officers have informed the Company that they currently intend to vote all of their shares of Company common stock "FOR" the proposal to adopt the merger agreement, "FOR" approval of the nonbinding advisory proposal regarding "golden parachute" compensation and "FOR" the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Proxies and Revocation

        Any stockholder of record entitled to vote at the special meeting may submit a proxy by telephone, over the Internet, or by returning the enclosed proxy card in the accompanying prepaid reply envelope, or may vote in person at the special meeting. If your shares of Company common stock are held in "street name" by your bank, brokerage firm or other nominee, you should instruct your bank, brokerage firm or other nominee on how to vote your shares of Company common stock using the instructions provided by your bank, brokerage firm or other nominee. If you fail to submit a proxy or to vote in person at the special meeting, or if you vote "ABSTAIN," or if you do not provide your bank, brokerage firm or other nominee with voting instructions, your shares of Company common stock will not be voted on the proposal to adopt the merger agreement, which will have the same effect as a vote "AGAINST" the proposal to adopt the merger agreement.

        You have the right to revoke a proxy, whether delivered over the Internet, by telephone or by mail, at any time before it is exercised, by submitting a later-dated proxy through any of the methods available to you, by giving written notice of revocation to our Secretary, which must be received by the Company at Five Hundred Staples Drive, Framingham, Massachusetts 01702 by the time the special meeting begins, or by attending the special meeting and voting in person. Attendance at the special meeting alone will not revoke your proxy.

Adjournments and Recesses

        Although it is not currently expected, the special meeting may be adjourned or recessed, including for the purpose of soliciting additional proxies, if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement or if a quorum is not present at the special meeting. Other than an announcement to be made at the special meeting of the time, date and place of an adjourned meeting, an adjournment generally may be made without notice. Any adjournment or recess of the special meeting for the purpose of soliciting additional proxies will allow the Company's stockholders who have already sent in their proxies to revoke them at any time prior to their use at the special meeting as adjourned or recessed.

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Appraisal Rights

        If the merger is completed, record holders of Company common stock as of the record date who submit a written demand for appraisal before the vote is taken on the adoption of the merger agreement, do not fail to perfect or otherwise effectively withdraw their demand or waive or lose the right to appraisal, do not vote in favor of the adoption of the merger agreement, hold their shares of Company common stock continuously through the effective time of the merger and otherwise comply with the procedures set forth in Section 262 of the DGCL may elect to pursue their appraisal rights to receive, in lieu of the $10.25 per share merger consideration, an amount in cash equal to the judicially determined "fair value" of their shares, which fair value will be determined as of the effective time of the merger and could be more or less than, or the same as, the per share merger consideration for the common stock. For a summary of the procedures set forth in Section 262 of the DGCL, see "Appraisal Rights" beginning on page [—]. An executed proxy that is not marked "AGAINST" or "ABSTAIN" will be voted "FOR" the adoption of the merger agreement and the stockholder submitting that proxy will lose the right to seek an appraisal of his, her or its shares of Company common stock.

        A copy of Section 262 of the DGCL is included as Annex D to this proxy statement. Failure to follow the procedures set forth in Section 262 of the DGCL will result in the loss of appraisal rights. We encourage you to read these provisions carefully and in their entirety.

        ANY COMPANY STOCKHOLDER WHO WISHES TO EXERCISE APPRAISAL RIGHTS OR WHO WISHES TO PRESERVE HIS, HER OR ITS RIGHT TO DO SO SHOULD REVIEW ANNEX D CAREFULLY AND SHOULD CONSULT HIS, HER OR ITS LEGAL ADVISOR, SINCE FAILURE TO TIMELY AND FULLY COMPLY WITH THE PROCEDURES SET FORTH THEREIN WILL RESULT IN THE LOSS OF SUCH RIGHTS.

Solicitation of Proxies; Payment of Solicitation Expenses

        The Company has engaged D.F. King to assist in the solicitation of proxies for the special meeting. The Company estimates that it will pay D.F. King a fee of approximately $17,500. The Company will also reimburse D.F. King for reasonable out-of-pocket expenses and will indemnify D.F. King and its affiliates against certain claims, expenses, losses, damages, liabilities and judgments. The Company may also reimburse brokers, banks and other custodians, nominees and fiduciaries representing beneficial owners of shares of Company common stock for their expenses in forwarding soliciting materials to beneficial owners of Company common stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Questions and Additional Information

        If you have more questions about the merger or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please call D.F. King, our proxy solicitor, toll-free at (866) 796-7179.

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PARTIES TO THE MERGER

THE COMPANY

Staples, Inc.
Five Hundred Staples Drive
Framingham, Massachusetts 01702
(508) 253-5000

        Staples brings technology and people together in innovative ways to consistently deliver products, services and expertise that elevate and delight customers. Staples is in business with businesses and is passionate about empowering people to become true professionals at work.

        We are committed to providing superior value to our customers through a broad selection of products, easy to use websites and mobile platforms, an integrated retail and online shopping experience and a wide range of print and marketing and technology services. We pioneered the office products superstore concept by opening the first office products superstore in Brighton, Massachusetts in 1986 to serve the needs of small businesses, and we currently serve businesses of all sizes and consumers primarily in North America, with additional offices in South America and Asia. Our delivery businesses account for a majority of our sales and many of our delivery customers place their orders online, making Staples one of the largest internet resellers in the world. Shares of Staples common stock are traded on The Nasdaq Global Select Market under the symbol "SPLS." The principal executive offices of Staples are located at Five Hundred Staples Drive, Framingham, Massachusetts 01702, and its telephone number is (508) 253-5000.

        For more information about the Company, see "Where You Can Find More Information" beginning on page [—].

PARENT

Arch Parent Inc.
c/o Sycamore Partners Management, L.P.
9 West 57th Street, 31st Floor
New York, NY 10019
(212) 796-8500

        Arch Parent Inc. is a Delaware corporation that was formed solely for the purpose of entering into the merger agreement and related agreements and consummating the merger and the other transactions contemplated thereby. Parent is an affiliate of Sycamore and has not engaged in any business except for activities incidental to its formation and as contemplated by the merger agreement and the related financing transactions. Upon completion of the merger, the Company will be a wholly-owned subsidiary of Parent. The principal executive offices of Parent are located at 9 West 57th Street, 31st Floor, New York, New York 10019, and its telephone number is (212) 796-8500.

MERGER SUB

Arch Merger Sub Inc.
c/o Sycamore Partners Management, L.P.
9 West 57th Street, 31st Floor
New York, NY 10019
(212) 796-8500

        Arch Merger Sub Inc. is a Delaware corporation that was formed solely for the purpose of entering into the merger agreement and related agreements and consummating the merger and the other transactions contemplated thereby. Merger Sub is a wholly-owned subsidiary of Parent and has not engaged in any business except for activities incidental to its formation and as contemplated by the merger agreement and the related financing transactions. Upon the completion of the merger, Merger Sub will cease to exist and the Company will continue as the surviving corporation of the merger, which we refer to as the surviving corporation. The principal executive offices of Merger Sub are located at 9 West 57th Street, 31st Floor, New York, New York 10019, and its telephone number is (212) 796-8500.

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THE MERGER

        This discussion of the merger is qualified in its entirety by reference to the merger agreement, which is attached to this proxy statement as Annex A. You should read the entire merger agreement carefully as it is the legal document that governs the merger.

        The merger agreement provides that Merger Sub will merge with and into the Company. The Company will be the surviving corporation in the merger and will continue to do business following the merger. As a result of the merger, the Company will cease to be a publicly traded company. You will not own any shares of the capital stock of the surviving corporation.

Overview of the Merger

        The Company, Parent and Merger Sub entered into the merger agreement on June 28, 2017. Under the terms of the merger agreement, Merger Sub will be merged with and into the Company, with the Company surviving the merger as a wholly-owned subsidiary of Parent. Parent and Merger Sub are beneficially owned by investment funds affiliated with Sycamore. In connection with the merger, each share of Company common stock issued and outstanding immediately prior to the effective time of the merger (other than the dissenting shares and the cancelled shares) will be automatically converted into the right to receive the per share merger consideration, without interest and subject to deduction for any required withholding tax.

        Following and as a result of the merger:

    Company stockholders will no longer have any interest in, and will no longer be stockholders of, the Company, and will not participate in any of the Company's future earnings or growth;

    shares of Company common stock will no longer be listed on the Nasdaq Stock Market, and price quotations with respect to shares of Company common stock in the public market will no longer be available; and

    the registration of shares of Company common stock under the Exchange Act will be terminated.

Directors and Officers of the Surviving Corporation

        The directors of Merger Sub immediately prior to the effective time of the merger will be the initial directors of the surviving corporation. The officers of the Company immediately prior to the effective time of the merger will be the initial officers of the surviving corporation.

Background of the Merger

        The Board, together with members of the Company's senior management, regularly reviews and assesses the Company's business and competitive landscape and periodically reviews and assesses strategic alternatives available to enhance value to stockholders.

        On August 15, 2016, the Board held a telephonic meeting, with members of senior management and representatives of Barclays and Morgan Stanley present for certain portions. Barclays has been a long-time financial advisor to the Company and Morgan Stanley had been retained by the Board earlier in 2016 to assist in reviewing the Company's strategic alternatives in the event that the Company's announced merger with Office Depot, Inc. were not consummated. At the meeting, the Board reviewed the challenging market environment for, and the declining performance of, the Company's retail business. The Board also reviewed, with the assistance of Barclays and Morgan Stanley, various strategic alternatives for the Company's North American retail business and the Company as a whole, including the continued execution of the Company's business plan as an independent company; a spin-off of the retail business to stockholders; a spin-off and concurrent sale of the retail business to

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Party A, a potential strategic buyer in the Company's industry; a sale of the retail business; and a sale of the Company. The Company's Chief Legal Officer discussed certain antitrust risks of transacting with Party A. The Board, with Barclays and Morgan Stanley, then discussed the limited number of strategic buyers participating in the Company's industry and the low likelihood that any of them would be interested in such an acquisition in view of their strategic direction or the absence of a compelling strategic rationale for such an acquisition. The Board determined to continue to explore the available strategic alternatives and authorized management to hold preliminary exploratory discussions with Party A and three identified potential financial buyers, Parties B, C and D, that the Board believed would be potentially interested in, and capable of, executing a transaction with the Company.

        On August 18, 2016, Ms. Shira Goodman, the then interim Chief Executive Officer of the Company (who was appointed Chief Executive Officer in September 2016), reached out to the Chief Executive Officer of Party A to schedule a meeting. A meeting was ultimately scheduled for September 8, 2016.

        On August 24, 2016, Ms. Goodman and Ms. Christine Komola, the Chief Financial Officer of the Company, held preliminary exploratory discussions with Party B, a financial buyer.

        On September 2, 2016, Ms. Goodman and Ms. Komola held preliminary exploratory discussions with Party C, a financial buyer.

        On or about September 2, 2016, the Company and Party A entered into a mutual confidentiality agreement, which included a reciprocal 12-month standstill provision that would terminate, as to Party A, upon the signing of a definitive agreement with a third party for the sale of the Company.

        On September 8, 2016, Ms. Goodman and Ms. Komola met with the Chief Executive Officer and Chief Financial Officer of Party A and discussed in general terms a possible acquisition of the Company's North American retail business. At the meeting, Party A indicated that it would be interested in exploring such an acquisition, particularly if it included the Staples brand and website URL.

        On September 13, 2016, the Board held a meeting, with members of senior management and representatives of Barclays and Morgan Stanley present for certain portions. At the meeting, the Board reviewed possible strategic alternatives, including continued execution of the Company's business plan as an independent company; a spin-off of the retail business to stockholders; a spin-off and concurrent sale of the Company's retail business to Party A; a sale of the Company's retail business; and a sale of the Company as a whole. The Board discussed the interest of Party A in a possible transaction and determined that the Company would not be interested in including the Staples brand or website URL in any sale of its retail business in view of the adverse impact such sale would have on the Company's remaining business. The Company's Chief Legal Officer reviewed certain antitrust risks relating to any such transaction. After reviewing the strategic alternatives, the Board authorized management to continue to explore the potential separation of the Company's retail business and also authorized management to continue to hold exploratory meetings with the three identified financial buyers that the Board believed would be potentially interested in, and capable of, executing a transaction with the Company.

        On September 14, 2016, Ms. Goodman communicated to the Chief Executive Officer of Party A that the Board was interested in exploring a possible sale of the Company's retail business if it were not to include the Staples brand or website URL.

        On September 23, 2016, the Chief Executive Officer of Party A communicated to Ms. Goodman that Party A would be interested in a potential acquisition of the Company's retail business only if it were to include the Staples brand and website URL.

        On October 14, 2016, Ms. Goodman and Ms. Komola held preliminary exploratory discussions with Party D, a financial buyer.

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        On October 24, 2016, the Company and Party C entered into a confidentiality agreement, which contained a 12-month standstill obligation that would terminate upon the signing of a definitive agreement with a third party for the sale of the Company.

        On November 30, 2016, Ms. Komola, with representatives of Barclays, had preliminary discussions with management of Party A, and its financial advisor, about the possible sale of the Company's retail business. At the meeting, Party A indicated that it would be interested in acquiring the U.S. retail business but not the Canadian retail business. Following such discussions, both parties indicated that they would further evaluate such a transaction.

        On December 6, 2016, the Board held a meeting, with members of senior management and representatives of Barclays and Morgan Stanley present for certain portions. At the meeting, the Board and management reviewed and discussed the continuing market challenges that made it difficult to forecast the Company's future performance, including the secular decline in office products sales, the continuing shift in customer preference from retail stores to online sales, and the increased competition from existing and new market participants. At the meeting, the Board reviewed potential strategic alternatives, including continued execution of the Company's business plan as an independent company; a spin-off of the Company's retail business to stockholders; a spin-off and concurrent sale of the Company's retail business to Party A; a sale of the retail business; and a sale of the Company as a whole. The Board reviewed Party A's potential interest in an acquisition of the Company's U.S. retail business if the Staples brand and website URL were included. Legal counsel reviewed certain antitrust risks relating to any such acquisition, including an assessment of the likelihood of an extended review by federal or state governmental authorities. The Board also reviewed specific potential financial buyers that it believed would be most likely to have both the financial capability and interest to acquire the Company. The Board determined that the Company should continue to pursue discussions with Party A regarding the potential sale of the U.S. retail business and also pursue discussions with a selected group of five identified financial buyers (Sycamore and Parties B, C, D and E) regarding their potential interest in an acquisition of the Company.

        Following the December Board meeting, representatives of Barclays and Morgan Stanley approached the identified five potential financial buyers to assess their interest in exploring a potential acquisition of the Company as a whole. Also, Ms. Komola informed the Chief Financial Officer of Party A, and Barclays and Morgan Stanley informed the financial advisor to Party A, that the Board had authorized the Company to share additional information with Party A to assist it in formulating a proposal to acquire the Company's U.S. retail business.

        On December 19, 2016, the Company entered into a Clean Room Agreement with Party A, pursuant to which the Company subsequently provided to selected personnel of, and advisors to, Party A certain information concerning the Company's retail business.

        In late December, 2016 and early January, 2017, the Company and each of Sycamore, Party B, Party D and Party E, entered into confidentiality agreements, which contained a 12-month standstill obligation that would terminate upon the signing of a definitive agreement with a third party for the sale of the Company.

        On January 18 and 19, 2017, Ms. Goodman, Ms. Komola and Mr. Jeffrey Hall, the Company's Vice Chairman and Chief Administrative Officer, together with representatives of Barclays and Morgan Stanley, met with each of the five identified financial buyers to discuss the Company's business. Subsequent to these meetings, the Company furnished to each of those potential buyers additional information concerning the Company's business to facilitate their assessment of the Company.

        On January 19, 2017, Party A submitted a non-binding preliminary indication of interest for two alternative potential transactions: an acquisition of the Company's U.S. retail business, excluding the Staples brand and website URL, for $500 million in cash, or the acquisition of the Company's U.S. retail business, including the Staples brand and website URL, in an all-stock transaction for shares

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representing up to 15% ownership of Party A, in each case subject to numerous conditions, including the completion of diligence.

        On January 24, 2017, the Board held a telephonic meeting, with members of senior management and representatives of Barclays and Morgan Stanley present for certain portions. At the meeting, the Board reviewed the preliminary discussions that had taken place with the identified five potential financial buyers and the preliminary non-binding indication of interest received from Party A for the acquisition of the Company's U.S. retail business. Representatives of Barclays and Morgan Stanley reviewed and discussed certain financial aspects of the proposals from Party A. After discussion, the Board determined that the proposals from Party A reflected valuations of the Company's U.S. retail business that were too low to act upon and that any discussions with Party A should be put on hold while the Company explored further the level of interest of potential financial buyers. The Board instructed Barclays and Morgan Stanley to convey to the financial advisor to Party A that its proposals were too low to act upon. The Board also instructed management, and Barclays and Morgan Stanley, to continue to pursue exploratory discussions with the identified five potential financial buyers. At the meeting, the Board also determined that it would be advisable, for administrative convenience, to establish a transaction committee, comprised of at least three independent directors, to, among other things, oversee and direct the process of exploring and considering a sale or other strategic transaction involving the Company if and when further progress was made in the discussions with the potential bidders.

        Following the January 24 Board meeting, preliminary diligence calls were held between members of management, together with representatives of Barclays and Morgan Stanley, and each of Sycamore, Party B, Party C and Party E.

        On February 16, 2017, the Board, by unanimous written consent, established a Transaction Committee, which we refer to as the Transaction Committee or the Committee, comprised of four independent directors, Messrs. Robert Sulentic, Curtis Feeny, John Lundgren and Paul Walsh, with power and authority to oversee and direct the process of exploring and considering a sale or other strategic transaction involving the Company, with final approval of any such transaction to require action by the full Board.

        On February 17, 2017, the Transaction Committee held a telephonic meeting, with a representative of Wilmer Cutler Pickering Hale and Dorr LLP, which we refer to as WilmerHale, counsel to the Company, present for certain portions. During the meeting, WilmerHale reviewed with the Transaction Committee the scope of the Board resolutions establishing the Committee and the directors' fiduciary duties under Delaware law. The Transaction Committee considered and approved a form of letter to be delivered to members of Staples management instructing them that, among other things, there should be no discussions between management and potential buyers regarding employment, compensation or equity participation of management in connection with any possible transaction until the Board determined that such discussions were appropriate. The Transaction Committee also discussed the engagement of financial advisors and legal counsel in connection with a potential transaction. After discussion, the Transaction Committee determined to retain Barclays and Morgan Stanley as financial advisors to the Board, subject to a review of disclosures from Barclays and Morgan Stanley as to their respective relationships with the identified potential bidders and also the negotiation of the terms of engagement. The Transaction Committee also determined to engage special Delaware counsel to advise the Transaction Committee and the independent directors with regard to their fiduciary duties.

        Between February 15 and 21, 2017, Ms. Goodman and other members of management of the Company, with representatives of Barclays and Morgan Stanley, held telephonic discussions with each of Sycamore, Party B, Party C, Party D and Party E to discuss the business of the Company. Each of these potential buyers was also granted access to a virtual data room containing selected financial and business information regarding the Company.

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        On February 23 and 24, 2017, Sycamore, Party B, Party C and Party E each submitted to the Company preliminary, non-binding indications of interest for a potential transaction, subject to various conditions, including the completion of diligence. Sycamore submitted a proposal to acquire the Company for a price of $11.00 per share in cash and indicated that it would require financial support from its limited partners to complete an acquisition of the Company as a whole. Sycamore also submitted alternative proposals to acquire the Company's North American retail business for $1.2 to $1.4 billion or the Company's U.S. retail business for $375 to $450 million. Party B submitted a proposal to acquire the Company for a price of $11.15 to $11.55 per share in cash (including a $1.40 per share cash dividend) and also expressed interest in alternative transactions, including participation in a leveraged recapitalization, an acquisition of the Company's North American retail and online consumer business, potentially coupled with a corresponding investment in the remaining public company, or an acquisition of the Company's North American delivery and international businesses concurrent with a sale of the Company's North American retail business to a third party. Party C submitted a proposal to acquire the Company for a price of $11.00 to $11.50 per share in cash, and also expressed interest in investing in the Company as a minority investor or purchasing the Company's North American delivery business. Party C expressed in its proposal an intention to explore a concurrent or subsequent separation of all or part of the North American retail operations. Party E submitted a proposal to acquire the Company for a price of $10.50 to $11.50 per share in cash. Party D declined to submit an indication of interest and indicated it was not interested in continuing to pursue discussions regarding a potential transaction.

        On February 27, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson & Corroon LLP, which we refer to as Potter Anderson, present for certain portions. At the meeting, representatives of Barclays and Morgan Stanley reviewed certain financial aspects of the proposals received from Sycamore, Party B, Party C and Party E. It was noted that Party B had requested a 30-day period of exclusivity, which was rejected by the Committee. Representatives of Barclays and Morgan Stanley informed the Committee that they had not been contacted by Party A regarding a potential transaction with the Company since they had conveyed to Party A the Board's determination that its proposals to acquire the Company's U.S. retail business were inadequate. After discussion, the Committee determined that the Company should allow Sycamore and Parties B, C and E to continue to perform diligence on the Company with the goal of obtaining firmer and higher bids for the sale of the Company. The Committee then began a discussion as to whether there were other potential strategic bidders that should be included in the Company's strategic process. The Committee also determined to retain Potter Anderson as special Delaware counsel. The Committee also discussed the prior relationships of Barclays and Morgan Stanley with the Company. Specifically, it was noted that Barclays had served as financial advisor to the Company in connection with its 2015 merger agreement with Office Depot, which was subsequently terminated, and the sales of the Company's U.K. and European businesses in 2016. It was also noted that Morgan Stanley had been engaged by the Board in February 2016 to assist in a review of the Company's strategic alternatives and had also been engaged in 2016 to serve as financial advisor to the Company in connection with the sale of the Company's Australia and New Zealand businesses. After discussion, the Committee determined that it would retain Barclays and Morgan Stanley as financial advisors to the Board in connection with a potential strategic transaction, subject to review of disclosures as to the relationships of such advisors with the potential bidders and negotiation of satisfactory terms of engagement.

        On March 1, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays and Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. During the meeting, representatives of Barclays and Morgan Stanley reviewed certain financial aspects of a potential sale of the Company's U.S. retail business to Party A. Legal counsel reviewed potential U.S. antitrust issues that could arise from any sale of the Company's U.S. retail business to Party A. Management of the Company also discussed certain operational issues

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relating to the separation of the U.S. retail business from the remainder of the Company. After discussion, the Committee determined to continue to explore with financial buyers the potential sale of the Company as a whole and to evaluate later in the process whether to re-engage with Party A regarding a possible sale of the U.S. retail business.

        On March 5, 2017, the Transaction Committee held an in-person meeting, with Potter Anderson present for certain portions. A representative of Potter Anderson reviewed for the Committee their fiduciary duties in considering strategic alternatives and also reviewed possible processes and timelines for a potential transaction.

        On March 6, 2017, the Transaction Committee held an in-person meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. At the meeting, representatives of Barclays and Morgan Stanley reviewed with the Committee the Company's outreach to third parties with respect to a potential transaction, the preliminary non-binding indications of interest received by the Company, and certain financial aspects of such indications of interest. Representatives of Barclays and Morgan Stanley also reviewed with the Committee the limited number of potential strategic buyers. After discussion, it was the consensus of the Committee that the Company should not contact any of such strategic buyers because of the low likelihood that any of such strategic buyers would be interested in a transaction with the Company (in view of their strategic direction or the absence of a compelling strategic rationale for such a transaction) and because, in light of that low likelihood, it would be inadvisable to risk the identified financial buyers becoming unwilling to continue to devote the time and resources necessary to perform diligence on the Company if it became known that potential strategic buyers were included in the sale process. The Committee also discussed the competitive risks of sharing confidential information with strategic buyers not likely to be bidders.

        On March 6 and 7, 2017, the Board held an in-person meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. At the meeting, representatives of WilmerHale and Potter Anderson reviewed with the directors their fiduciary responsibilities in considering strategic alternatives, as well as various ways in which a sale process might be conducted to comply with such duties, including through a pre-signing market check. The Board reviewed the indications of interest received from Sycamore, Party B, Party C and Party E on February 23 and 24, as well as the indications of interest received from Party A on January 19. Representatives of Barclays and Morgan Stanley reviewed certain financial aspects of each of the proposals. The Board then discussed the Company's current and forecasted financial performance and the risks and uncertainties associated with its forecasts, including the Company's difficulty, during the last five years, meeting its financial guidance due, in large part, to challenging market conditions and trends. The Board also reviewed potential upside opportunities for the Company's initiatives to increase revenues and profitability, including the initiatives relating to potential tuck-in acquisitions, increased focus on the mid-market, reductions in operating costs and accelerated growth of products other than office supplies. (See "—Company Financial Forecasts; Other Company Information.") After discussion, the Board and management concluded that management should continue to develop such upside opportunities and share them with the financial bidders, but that they were too speculative, and subject to too many risks and uncertainties, to include in the Company's financial forecasts. The Board then discussed the strategic alternatives available to the Company, including continuing to execute its business as an independent company, a sale of its retail business and a sale of the Company as a whole. The Board reviewed, with its financial and legal advisors, the potential execution, antitrust and business risks associated with a sale of the Company's retail business, the significant time that would be required to complete a separation of the retail business and the risks and uncertainties of retaining and operating its contract delivery business. Representatives of Barclays and Morgan Stanley then reviewed with the Board the strategic buyers that might be potentially interested in an acquisition of the Company. After discussion, the Board concurred with the recommendation of the Transaction Committee not to contact any of the strategic buyers

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because of the low likelihood that any of such strategic buyers would be interested in a transaction with the Company and because, in light of that low likelihood, it would be inadvisable to risk the identified financial buyers becoming unwilling to continue to devote the time and resources necessary to perform diligence on the Company if it became known that potential strategic buyers were included in the sale process. The Board also discussed the competitive risks of sharing confidential information with strategic buyers that were not likely to be bidders. The Board determined that the Company should allow each of the financial buyers to perform further diligence regarding the Company and should continue to pursue discussions with each of them for a transaction involving the sale of the Company as a whole.

        On March 17, 2017, the Company provided Sycamore, Party B, Party C and Party E with access to additional financial and business information of the Company in the virtual data room.

        On March 20, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, WilmerHale and Potter Anderson present for certain portions. A representative of Barclays reviewed with the Committee the status of the diligence efforts of the bidders. Barclays also discussed the request by Party C that it be permitted to partner with Party D to submit a bid to acquire the Company. After discussion of the risks and benefits of such request, the Committee determined it would permit Party C to work with Party D to submit a joint bid. Barclays also discussed an unsolicited inbound call from an additional potential financial buyer, Party F, inquiring about a possible sale process of the Company, and the Committee authorized Barclays and Morgan Stanley to follow-up with Party F to assess its level of interest in acquiring the Company.

        On March 27, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Representatives of Barclays and Morgan Stanley updated the Committee regarding their discussions with Party F, in which Party F indicated it would not be interested in submitting a proposal to acquire the Company as they did not view the acquisition opportunity as compelling in view of the business risks. Barclays and Morgan Stanley also provided an update with respect to the diligence efforts of the other bidders.

        On April 3, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Representatives of Barclays and Morgan Stanley updated the Committee regarding their discussions with the bidders, including that Party C and Party D had agreed to work together for the purposes of submitting a joint bid to acquire the Company. The Committee also discussed the disclosures provided by Barclays and Morgan Stanley regarding their respective relationships with the Company and each of the bidders participating in the strategic alternatives process. The Committee determined that such relationships would not impair the ability of either Barclays or Morgan Stanley to provide impartial advice to the Board and reconfirmed its determination to engage Barclays and Morgan Stanley as financial advisors to the Board, subject to completion of their respective engagement letters. At the meeting, Mr. Lundgren reported that he had received inquiries from two search firms seeking to ascertain whether he would be interested in exploring certain positions with Party C, to which Mr. Lundgren had replied that he was not in a position to discuss serving in any such capacity at this time.

        From April 3 to April 20, 2017, management of the Company, with representatives of Barclays and Morgan Stanley, participated in full day, in-person diligence sessions with each of Sycamore, Party B, Parties C and D, and Party E.

        On April 4, 2017, an article in The Wall Street Journal reported that the Company was exploring a potential sale to a number of financial buyers. On April 3, 2017, the closing price for Company common stock on The Nasdaq Stock Market was $8.66 per share.

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        On April 4, 2017, the Company entered into engagement letters with Barclays and Morgan Stanley to serve as financial advisors to the Board of Directors in connection with a potential transaction.

        On April 6, 2017, after discussions with Mr. Sulentic and WilmerHale, Mr. Lundgren resigned from the Transaction Committee in order to avoid any appearance of a potential conflict of interest as a result of the inquiries he had received regarding his potential interest in a position with Party C.

        On April 10, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. At the meeting, representatives of Barclays and Morgan Stanley discussed an inbound call from Party G, a potential financial buyer, inquiring about the sale process being undertaken by the Company in light of press reports, and the Committee instructed Barclays and Morgan Stanley to follow-up with Party G to assess its level of interest in participating in the process. Barclays and Morgan Stanley also reported on the diligence efforts of the bidders.

        Following the publication of The Wall Street Journal article, the financial advisor to Party A contacted Barclays and Morgan Stanley and reiterated the proposals made by Party A in January 2017.

        On April 17, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. At the meeting, representatives of Barclays and Morgan Stanley updated the Committee as to the bidders' diligence efforts and also reported that Party G had informed Barclays and Morgan Stanley that it would not be interested in making a proposal to acquire the whole Company, but might be interested in an acquisition of the Company's contract delivery business. Barclays and Morgan Stanley then reported on the inbound call from the financial advisor to Party A, and the Committee discussed the potential benefits and risks of a transaction with Party A.

        On April 24, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. During the meeting, representatives of Barclays and Morgan Stanley updated the Committee on the continued diligence of the bidders and discussed next steps in the process, including a proposed date of May 22, 2017 for bidders to submit revised bids. In addition, WilmerHale and Potter Anderson provided a summary of, and there was discussion regarding, the material terms of the form of merger agreement to be provided to the bidders, which terms were designed to provide for certainty of closing and to enable the Board effectively to respond to unsolicited third party acquisition proposals. The Committee discussed, among other things, a proposed termination fee of 2.5% of the equity value of the Company to be paid by the Company in the event of a determination by the Board to pursue or accept a superior proposal, which we refer to as the Company Termination Fee, a proposed reverse termination fee of 7% of the equity value of the Company to be paid by the buyer if the buyer were unable to close by reason of, among other things, an inability to obtain debt financing, which we refer to as the Buyer Termination Fee, the provisions relating to the Company's ability to solicit and respond to acquisition proposals, the definition of "Material Adverse Effect", the interim operating covenants and the acceleration of outstanding unvested equity awards 180 days after the closing.

        On April 30, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. At the meeting, representatives of Barclays and Morgan Stanley updated the Committee regarding their communications with the bidders, including a request by Party B for additional time beyond May 22, 2017 to submit a final bid in order to complete its diligence. Barclays and Morgan Stanley also discussed an inbound call from Party A's financial advisor, in which the advisor reaffirmed the proposals made by Party A in January 2017. There was discussion about concerns expressed by the bidders as to the achievability of the upside opportunities from management's growth and profit improvement initiatives, and management informed the Committee

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that they were working to provide information that could demonstrate their potential achievability. The Committee then discussed the advisability of approaching additional strategic buyers in the sales process or approaching one or more of the financial bidders regarding a sale of only the retail business of the Company. After discussion, the Committee determined not to extend the proposed bid deadline for Party B in view of the risk that such an extension would be harmful to maintaining the competitive nature of the process for the other bidders. The Committee noted that no strategic buyers had approached the Company or its financial advisors even after the April 4th Wall Street Journal article concerning a possible sale of the Company and, after discussion, determined not to approach potential strategic buyers or to reconsider a possible sale of the Company's retail business for the reasons discussed at the March 6-7 Board meeting.

        On May 1, 2017, the Board held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Representatives of Barclays and Morgan Stanley reviewed the sale process to date and the status of the bidders' diligence efforts, as well as the reiteration of Party A's January 2017 proposal by its financial advisor. It was noted that there had been no substantial inbound expressions of interest from new prospective buyers even after the publication of The Wall Street Journal article other than the approach by Party G. Members of the Committee reviewed for the Board the determinations of the Committee not to extend the proposed bid deadline for Party B and not to approach potential strategic buyers or to reconsider the possible sale of the Company's retail business, and the Board concurred with such determinations.

        On May 1, 2017, Barclays and Morgan Stanley delivered a process letter to Sycamore, Party B, Parties C and D, and Party E, including a form of proposed merger agreement, consistent with the material terms discussed with the Board on April 24, 2017, and requested final proposals for the acquisition of the Company, and a mark-up of the merger agreement, by May 22, 2017.

        On May 2, 2017, an article in Reuters reported that a number of financial buyers were exploring an acquisition of the Company.

        Also on May 2, 2017, Party E informed Barclays and Morgan Stanley that it would require eight to 10 weeks of extensive additional diligence in order to submit a final bid and that it was not in a position to indicate what its offered price would be or whether it would be within the indicative price range provided to the Company in February 2017.

        On May 3, 2017, Parties C and D indicated that they were no longer interested in a transaction with the Company because they did not view a potential acquisition as an attractive enough investment opportunity to pursue.

        On May 8, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. During the meeting, representatives of Barclays and Morgan Stanley reported that Parties C and D had informed them that they would not be proceeding further in the sale process and that Party E had indicated it would need up to 10 weeks to submit a bid. After discussion, the Committee determined not to extend the deadline for Party E because of the potential adverse effects on the competitive nature of the sale process and because the Committee was concerned about the potential significant disruption to the Company's business that would be caused by an extension of the sale process. Barclays and Morgan Stanley also reported that they had received another inbound call from Party A's financial advisor, in which the advisor indicated that Party A remained interested in pursuing an acquisition of the Company's U.S. retail operations and that the chief executive officers of the two companies should meet to discuss a possible acquisition. The Committee determined that such meeting should take place with Party A after the Company's receipt of the final round of bids on or about May 22, 2017.

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        During the weeks of May 8 and May 15, 2017, management of the Company, with representatives of Barclays and Morgan Stanley, conducted multiple additional diligence sessions with Sycamore and Party B.

        On May 15, 2017, the Transaction Committee held a telephonic meeting with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Representatives of Barclays and Morgan Stanley provided an update regarding the diligence efforts of Sycamore and Party B. Barclays and Morgan Stanley also reported that they had received inbound calls from a foreign strategic buyer, which they believed lacked sufficient financial resources and a sufficient acquisition track record to likely be a credible bidder, and from a financial buyer, which they believed would likely not have the financial resources to, or interest in, buying the whole Company. After discussion, the Committee determined not to engage with either party at that time. Ms. Goodman reported that she, Ms. Komola and Mr. Hall were scheduled to meet with Party A on May 30, 2017.

        On May 22, 2017, Sycamore submitted a non-binding proposal to acquire the Company for a price of $11.50 per share in cash and Party B submitted a non-binding proposal to acquire the Company for $10.25 per share in cash, in each case subject to conditions including additional diligence. Both proposals were for a merger that would contain no financing condition. Sycamore submitted draft financing commitments from three financial institutions and indicated that the equity financing would be provided by Sycamore and certain of its limited partners. Party B submitted highly confident letters from three financial institutions and stated that other subordinated debt financing would be provided by Party B and two other institutional investors in approximately equal proportions. Both Sycamore and Party B submitted preliminary comments on the draft merger agreement.

        On May 23, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. At the meeting, representatives of Barclays and Morgan Stanley reviewed the proposals received on May 22nd and certain financial aspects of the proposals. The Committee and its financial advisors noted that Sycamore had not done as much diligence as Party B and were concerned that Sycamore would not maintain its $11.50 offer price through the signing of a definitive merger agreement and believed it would therefore be beneficial to continue to engage with both bidders. After discussion, the Committee determined that Barclays and Morgan Stanley should inform Party B that its bid was lower than another bid and that it should work to increase its price. The Committee also determined that the Company should work with Sycamore so that it could complete its diligence process as expeditiously as possible and that the financial advisors should convey to Sycamore that the Committee would be prepared to recommend a transaction at the proposed price to the Board, subject to the completion of diligence, satisfactory negotiation of definitive transaction documents and receipt of a firm bid (including the necessary equity and debt financing commitments) by mid-June.

        Later on May 23, 2017, the Board held a telephonic meeting, with senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Representatives of Barclays and Morgan Stanley reviewed the revised proposals of Sycamore and Party B and discussed with the Board certain financial aspects of the proposals. After discussion, the Board concurred with the messages to both bidders recommended by the Transaction Committee.

        Following the Board meeting, representatives of Barclays and Morgan Stanley conveyed to Sycamore and Party B the messages approved by the Board.

        Following the Board meeting, members of the Transaction Committee discussed that Party C was no longer part of the sale process and that therefore the participation of Mr. Lundgren would no longer create the risk of an appearance of a potential conflict of interest. The Committee determined

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that it would benefit from Mr. Lundgren's experience and, accordingly, invited Mr. Lundgren to attend future Committee meetings as an observer.

        On May 30, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Mr. Lundgren also attended. At the meeting, representatives of Barclays and Morgan Stanley discussed their communications with Sycamore and Party B, the fact that Party B appeared to remain ahead of Sycamore in its diligence and the expected time required by each bidder to be in a position to submit a final bid. The Committee instructed Barclays and Morgan Stanley to confirm Sycamore's ability to obtain the necessary equity and debt financing commitments for an acquisition and to continue discussions with Party B but convey that its valuation of the Company needed to be increased to be competitive.

        Later on May 30, 2017, Ms. Goodman, Ms. Komola and Mr. Hall met with the Chief Executive Officer and Chief Financial Officer of Party A to discuss further the potential sale of the Company's U.S. retail business. At the meeting, Party A indicated it would present in early June a non-binding proposal to acquire the Company's U.S. retail business without the Staples brand.

        From May 31 to June 6, 2017, management of the Company, with representatives of Barclays and Morgan Stanley, held further diligence discussions with both Sycamore and Party B.

        On June 4, 2017, Party B submitted a revised proposal to acquire the Company for a price of $10.50 per share in cash and requested an exclusivity period of three weeks to complete its diligence process and negotiate a definitive merger agreement with the Company.

        On June 5, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Mr. Lundgren also attended. At the meeting, representatives of Barclays and Morgan Stanley discussed their communications with the bidders since the Committee's last meeting, including the revised proposal by Party B to acquire the Company at a price of $10.50 per share and its request for exclusivity, which request for exclusivity was rejected by the Committee. Ms. Goodman also discussed the May 30th meeting with Party A.

        Later on June 5, 2017, Party A submitted a non-binding proposal to acquire the Company's U.S. retail business, excluding rights to the Staples brand and website URL, for cash consideration of $625 million to $700 million. The non-binding proposal was subject to numerous conditions, including the completion of diligence.

        From June 7 to June 26, 2017, management of the Company, with representatives of Barclays and Morgan Stanley, continued to hold diligence sessions with Sycamore.

        On June 8, 2017, Party B informed Barclays and Morgan Stanley that it was no longer interested in pursuing a transaction with the Company, and, after Barclays and Morgan Stanley inquired whether Party B would be interested in proceeding at its previous proposed price of $10.25 per share, Party B indicated that it would not be interested in proceeding at that price or even a lower price.

        On June 10, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Mr. Lundgren also attended. At the meeting, representatives of Barclays and Morgan Stanley reported on Party B's decision to withdraw from the process. Barclays and Morgan Stanley also updated the Committee regarding the continued diligence efforts of Sycamore. They also reported that representatives of Sycamore had confirmed that the financial institutions providing the debt financing for Sycamore were committed to financing an acquisition of the Company as a whole. Finally, Barclays and Morgan Stanley reported that they were reviewing the revised proposal received from Party A to acquire the Company's U.S. retail business.

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        On June 11, 2017, Sycamore submitted a revised proposal to acquire the Company at a price of $11.00 per share, together with updated unsigned financing commitment letters from three financial institutions for funded indebtedness of up to $5.3 billion and an indication that Sycamore would be prepared to commit equity financing of up to $1.7 billion. The proposal also included signed letters of intent for up to a total of $1.425 billion in equity commitments from five limited partners of Sycamore. Sycamore also submitted a full mark-up of the merger agreement. Sycamore indicated it would be ready to sign a definitive merger agreement as expeditiously as possible, subject to confirmatory diligence, and also indicated that it would require expense reimbursement agreement of up to $5 million in order to continue in the process.

        On June 12, 2017, the Transaction Committee held an in-person meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Mr. Lundgren also attended. Representatives of Barclays and Morgan Stanley discussed the most recent proposal from Party A and the revised proposal from Sycamore to acquire the Company at a price of $11.00 per share in cash, subject to the completion of confirmatory diligence. Barclays and Morgan Stanley reviewed and discussed certain financial aspects of Sycamore's proposal. The Committee and its advisors also discussed the expense reimbursement request by Sycamore in its revised proposal. WilmerHale provided a summary of the revisions to the draft merger agreement proposed by Sycamore. In considering the proposal by Party A to acquire the Company's U.S. retail business, and the possibility of seeking to sell the Company's retail business to another buyer, the Committee reviewed preliminary illustrative ranges of hypothetical values for three hypothetical scenarios for the sale of the Company's U.S. retail business or North American retail business and the Company's continued operation of the remainder of its business as a stand-alone company, based on numerous assumptions provided by management. (See "The Merger—Company Financial Forecasts; Other Company Information—Other Company Information"). The Committee also considered the time, complexity and potential antitrust issues and business disruption that would be involved in the sale of the Company's retail business, and the risks, uncertainties and incremental costs of continuing to operate the Company's remaining business as a stand-alone company, including the risks relating to the secular decline in sales of office products and increasing competitive threats. After considering all of these factors, and the proposals received to date to acquire the Company's retail business, the Committee determined to recommend to the Board that the continued pursuit of a sale of the Company as a whole would be the best available alternative for stockholders of the Company.

        On June 12, 2017, the Board held an in-person meeting, with members of senior management, Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Representatives of Barclays and Morgan Stanley reviewed the activities with the various bidders since the May 23rd Board meeting and also reviewed the terms of the most recent proposal from Sycamore to acquire the Company for $11.00 per share and the most recent proposal from Party A to acquire the U.S. retail business for $625 million to $700 million in cash. Barclays and Morgan Stanley reviewed and discussed with the Board certain financial aspects of the proposals from Sycamore and Party A. The Committee then reviewed and discussed with the Board its recommendation that the Company should continue to pursue a sale of the whole Company, and the Board concurred. Ms. Goodman then reviewed and discussed potential upside opportunities from management's growth and profitability improvement initiatives shared with the financial bidders. The Board and management discussed the speculative nature of those upside opportunities and determined that the Company's forecasts furnished to the bidders should not be revised to take into account those upside opportunities in view of the risks and uncertainties of those upsides and also the risks and uncertainties of the forecasts themselves as a result of the challenging market trends and competitive conditions. A representative of WilmerHale reviewed certain issues in the mark-up of the merger agreement provided by Sycamore. WilmerHale also discussed that while Sycamore intended to separately finance the Company's U.S. retail, Canadian retail, and North American contract delivery businesses concurrently with or immediately after the closing of the proposed acquisition of the Company, Sycamore had confirmed that the separation of the

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businesses would not be a condition to the closing of the proposed acquisition. The Board then discussed the request of Sycamore for expense reimbursement of up to $5 million if Sycamore delivered a binding proposal (including financing commitments) at a price not less than $11.00 per share on or before June 27, 2017 or, on or before July 31, 2017, the Company entered into a definitive agreement for the sale of the Company to a third party or the Company terminated its process to pursue strategic alternatives. After discussion, the Board determined that it would be appropriate for the Company to enter into an expense reimbursement agreement with Sycamore substantially on such terms.

        On June 14, 2017, the Company and Sycamore entered into an expense reimbursement agreement for up to $5 million on substantially the terms proposed by Sycamore.

        From June 15 to June 28, 2017, representatives of WilmerHale and counsel to Sycamore, Kirkland & Ellis, LLP, which we refer to as K&E, negotiated the terms of the definitive merger agreement, including the provisions relating to the ability of the Company to respond to superior proposals, the information required to be provided by the Company to Sycamore in connection with its debt financing, the restrictions on the Company's activities between signing and closing, the Company Termination Fee and Buyer Termination Fee and the scope of the Company's obligation to provide commercially reasonable cooperation to Sycamore's review and planning for the separation of the retail and contract delivery businesses.

        On June 19, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Mr. Lundgren also attended. At the meeting, representatives of Barclays and Morgan Stanley updated the Committee regarding Sycamore's outstanding diligence items and the anticipated timing for finalizing the transaction documents. The Committee then discussed the non-binding proposal from Party A to acquire the Company's U.S. retail business, excluding the Staples brand and website URL, for $625 to $700 million in cash. After discussion, the Committee reaffirmed the determination of the Board at its June 12th meeting that the best available alternative for stockholders would be to continue to pursue a sale of the Company as a whole and therefor the Company should inform Party A that the Committee was not willing to pursue a sale of the U.S. retail business at the proposed value. The Committee also considered certain employee-related matters, including the need for a retention award program to retain key employees, other than senior management, who would be instrumental during the period prior to and immediately after the closing of a merger.

        On June 19, 2017, Barclays and Morgan Stanley informed the financial advisors to Party A that the Company was not interested in selling its U.S. retail business at the valuation proposed by Party A.

        During the weeks of June 13 and June 19, 2017, management of the Company, with representatives of Barclays and Morgan Stanley, continued to provide information to Sycamore in connection with its confirmatory diligence review of the Company.

        On June 21, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. At the meeting, the Committee and its financial and legal advisors reviewed and discussed Sycamore's plan to separately finance the retail and contract delivery businesses concurrently with or immediately after the closing of the acquisition of the Company, and, after discussion, the Committee reconfirmed its position that any separation of the Company's businesses could not be a condition to the closing of the acquisition.

        On June 22, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Mr. Lundgren also attended. At the meeting, representatives of Barclays, Morgan Stanley and WilmerHale updated the Committee on the status of discussions with Sycamore and K&E, including with respect to the separation of the Company's retail and contract delivery

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businesses, the status of Sycamore's financing commitments, and certain outstanding diligence issues that Sycamore had raised.

        On June 23, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Mr. Lundgren also attended. At the meeting, WilmerHale summarized the terms of the debt financing commitment letters provided by Sycamore and the status of negotiations regarding the merger agreement and financing commitment letters. The Committee also discussed with management the potential business disruption and employee retention risks that could arise as a result of Sycamore's plans to separately finance the Company's businesses upon or immediately after the closing and the need to formulate appropriate retention arrangements for key employees other than senior management to address those risks.

        Later on June 23, 2017, Sycamore informed Barclays and Morgan Stanley that it was reducing its proposed acquisition price from $11.00 to $10.00 per share as a result of its further review of the Company's business and its current assessment of the Company's business and future prospects. Also, K&E delivered to WilmerHale a revised draft of the merger agreement, which included, among other things, terms that would add certain closing conditionality relating to Sycamore's plan to separately finance the Company's retail and contract delivery businesses.

        In the morning on June 24, 2017, after discussions among members of the Transaction Committee and its financial and legal advisors regarding the revised draft of the merger agreement delivered by K&E, Barclays and Morgan Stanley, on behalf of the Transaction Committee, communicated to Sycamore that the Company was terminating any further discussions concerning a potential transaction, unless and until a satisfactory resolution of the closing conditionality issues were reached.

        Later on June 24, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Mr. Lundgren also attended. At the meeting, representatives of Barclays and Morgan Stanley reported on the reduction in the proposed purchase price to $10.00 per share. WilmerHale then discussed the status of negotiations regarding the terms of the definitive merger agreement, including the terms relating to closing conditionality. After discussion, the Committee instructed Barclays and Morgan Stanley that, if the merger agreement issues relating to closing conditionality were satisfactorily resolved, they should seek from Sycamore a price higher than $10.00 price per share.

        Later on June 24, 2017, after discussions among Sycamore, K&E, Ms. Komola, Barclays, Morgan Stanley and WilmerHale, the issues relating to closing conditionality were resolved to the satisfaction of the Committee and its advisors by the elimination of the terms objected to in the June 23 draft provided by K&E.

        Later on June 24, 2017, representatives of Barclays and Morgan Stanley informed Sycamore that the Transaction Committee was not prepared to recommend to the Board a transaction at a price of $10.00 per share.

        On June 25, 2017, the Board held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Representatives of Barclays and Morgan Stanley updated the Board on activities and discussions with Sycamore since the prior Board meeting on June 12 and reviewed the principal terms of Sycamore's most recent proposal to acquire the Company for a price of $10.00 per share, as well as the debt and equity financing structure for the proposal. WilmerHale reviewed the status of the negotiations regarding certain terms of the definitive merger agreement, including the closing conditions and Sycamore's proposal that the Company Termination Fee and Buyer Termination Fee be 2% and 4%, respectively, of the Company's equity value, and that the Company reimburse up to $25 million of Sycamore's expenses if the Company's stockholders do not approve the Merger under

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circumstances where the Company Termination Fee is not payable. Potter Anderson reviewed for the Board the fiduciary duties of the directors in considering a potential sale of the Company or other strategic alternatives.

        Later on June 25, 2017, Sycamore informed Barclays and Morgan Stanley that it would increase its proposed purchase price from $10.00 to $10.15 per share.

        On June 26, 2017, the Transaction Committee held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. Mr. Lundgren also attended. Representatives of Barclays and Morgan Stanley updated the Committee on Sycamore's increased offer. WilmerHale discussed the status of the negotiations related to the merger agreement. The Committee conveyed to its financial and legal advisors that the Buyer Termination Fee would need to be meaningfully higher than 4%. After discussion, the Committee instructed Barclays and Morgan Stanley to seek the best and final price from Sycamore as soon as possible and determined that it would consider a transaction with Sycamore only after receiving such best and final price.

        Later on June 26, 2017, the Board held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Andersen present for certain portions. Representatives of Barclays and Morgan Stanley updated the Board on the status of the discussions with Sycamore, and WilmerHale updated the board on the status of the negotiations on the definitive merger agreement and financing commitments. The Board discussed the need to put in place appropriate retention arrangements to retain key employees other than senior management between the signing of the merger agreement and at least the closing of the acquisition.

        On June 27, 2017, Sycamore conveyed to Barclays and Morgan Stanley its best and final price of $10.25 per share.

        Later on June 27, 2017, the Transaction Committee held a telephonic meeting, with senior management and representatives of Barclays, Morgan Stanley, WilmerHale, and Potter Anderson present for certain portions. Mr. Lundgren also attended. Representatives of Barclays and Morgan Stanley discussed Sycamore's best and final price of $10.25 per share. Barclays and Morgan Stanley then presented their financial analyses of the proposed transaction with Sycamore. The financial advisors also reviewed the general structure and amounts of Sycamore's equity and debt financing, including the equity co-investments by certain limited partners of Sycamore. WilmerHale reviewed the principal terms of the merger agreement, including the Company Termination Fee of $171 million (approximately 2.5% of equity value), the Buyer Termination Fee of $343 million (approximately 5% of equity value) and the reimbursement of up to $15 million of Sycamore's expenses if the stockholders of the Company do not approve the merger under circumstances where the Company Termination Fee is not payable. WilmerHale also reviewed certain employee-related matters that were addressed in the merger agreement, including the Company's plans to adopt an employee retention award program of up to $20 million for key employees other than senior management; to maintain its current annual employee bonus plan through the end of fiscal year 2017 (with appropriate adjustments for the merger); to provide that the existing severance agreements with officers and key employees cannot be terminated by the Company for two years following the merger; and to reimburse certain officers for potential excess parachute payment tax liabilities, if any, arising from the merger. (See "The Merger—Interests of Certain Persons in the Merger.") The Committee and its advisors discussed the timing and next steps for submitting the merger agreement to the Board for consideration. Potter Anderson reviewed with the Committee the updated disclosures received from each of Barclays and Morgan Stanley regarding certain relationships with Sycamore and the limited partners providing the equity co-investments. The Transaction Committee then unanimously adopted resolutions approving, and recommending that the Board approve, the merger agreement, subject to the finalization of the terms of the merger agreement and delivery of a fairness opinion to the Board by each of Barclays and Morgan Stanley.

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        Later on June 27, 2017 the Board held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present for certain portions. The Transaction Committee reported that it had unanimously approved, and recommended that the Board approve, the merger agreement, subject to the finalization of the terms of the definitive merger agreement and delivery of a fairness opinion by each of Barclays and Morgan Stanley. Barclays and Morgan Stanley then presented their financial analyses of the proposed transaction. (See "The Merger—Opinions of the Company's Financial Advisors.") The Board then reviewed preliminary illustrative ranges of hypothetical values for three hypothetical scenarios for the sale of the Company's U.S. retail business or North American retail business and the Company's continued operation of the remainder of its business as a stand-alone company, based on numerous assumptions provided by management. (See "The Merger—Company Financial Forecasts; Other Company Information—Other Company Information"). WilmerHale reviewed the principal terms of the definitive merger agreement. WilmerHale also reviewed for the Board the employee-related issues discussed at the meeting of the Transaction Committee held prior to the Board meeting. WilmerHale also reviewed a forum selection by-law amendment to be proposed for adoption by the Board upon the signing of the definitive merger agreement. The Board then authorized its legal and financial advisors and management to continue to work toward finalizing the definitive merger agreement and other transaction documents. The Board also authorized Ms. Goodman, with representatives of Barclays and Morgan Stanley, to meet in-person later that evening with the principals of Sycamore to discuss the plans and goals of Sycamore for the Company's business, as well as an internal and external communications strategy, but not to discuss the roles or compensation of management following the merger.

        Later on June 27, 2017, Ms. Goodman, with representatives of Barclays and Morgan Stanley, met in person with the principals of Sycamore to discuss Sycamore's plans and goals for the Company's business, as well as an internal and external communications strategy.

        On June 28, 2017, the Board held a telephonic meeting, with members of senior management and representatives of Barclays, Morgan Stanley, WilmerHale and Potter Anderson present. A representative of WilmerHale reviewed the principal terms of the definitive merger agreement between Sycamore and the Company, previously distributed to the directors, and the debt and equity commitment letters to be furnished by Sycamore. Representatives of Barclays and Morgan Stanley reviewed their financial analyses of the $10.25 in cash per share of Company Common Stock to be paid by Sycamore pursuant to the Merger Agreement. Barclays then orally rendered to the Board its opinion, subsequently confirmed by delivery of a written opinion, to the effect that, as of the date of such opinion and based on and subject to factors and assumptions set forth in such opinion, the $10.25 in cash per share to be offered to the holders of Company common stock (other than holders of excluded shares) was fair, from a financial point of view, to such holders. Morgan Stanley then orally rendered to the Board its opinion, subsequently confirmed by delivery of a written opinion, to the effect that, as of the date of such opinion and based on and subject to factors and assumptions set forth in such opinion, the $10.25 in cash per share to be received by the holders of Company common stock (other than holders of excluded shares) was fair, from a financial point of view, to such holders (See "The Merger—Opinions of the Company's Financial Advisors."). After discussion, the Board unanimously voted to approve the merger agreement and the transactions contemplated thereby, including the merger, to recommend the merger agreement to the Company's stockholders and to adopt the forum selection by-law amendment.

        Later on June 28, 2017, the Company and Sycamore executed the merger agreement and issued a joint press release announcing the transaction. Concurrently, Sycamore and the Co-Investors executed and delivered the equity commitment letters and limited guaranties, and the commitment parties executed and delivered the debt commitment letters.

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Reasons for the Merger; Recommendation of the Board

        At a meeting held on June 28, 2017, the Board, by a unanimous vote of all directors, (a) determined and declared that the merger agreement, the merger and the other transactions contemplated by the merger agreement, on the terms and subject to the conditions set forth therein, are advisable and in the best interests of the Company and its stockholders, (b) adopted and approved the merger agreement, the merger and the other transactions contemplated by the merger agreement, (c) declared that the terms of the merger are fair to the Company and the Company's stockholders, and (d) determined that it is advisable and in the best interests of the Company for the Board to submit the merger agreement to the Company's stockholders for adoption and directed that the merger agreement be submitted to the Company's stockholders at a special meeting of the Company's stockholders for their adoption, and recommended that the Company's stockholders adopt the merger agreement.

        Before making its recommendation, the Board consulted with its outside legal and financial advisors and with the Company's senior management team. In reaching its recommendation, the Board considered the following material factors that it believes support its decision to enter into the merger agreement and consummate the merger (which factors are not necessarily presented in order of relative importance):

    Best Alternative for Maximizing Stockholder Value.  The Board believed that receipt of the merger consideration of $10.25 per share in cash was more favorable to the Company stockholders than the likely value that would result from other potential transactions or remaining independent. This decision was based on, among other things, the Board's assessment of:

    the Company's historical operating and financial performance, including that the Company had experienced declines in sales in four of the past five fiscal years and that the Company, during the last five years, had difficulty meeting its financial guidance due, in large part, to overall challenging market conditions and trends, the secular decline in office products sales, the channel shift from retail to online sales and increased competition;

    the Company's competitive position, including that it faced a growing and diverse set of competitors, including online retailers, mass merchants, warehouse clubs, computer and electronics retail stores, specialty technology stores, print and marketing businesses, and a wide range of other retailers;

    the Company's future prospects, including risks related to achieving the revenue growth and profitability reflected in the Company's financial projections as a standalone company and the risks inherent in the Company's industry, including the competitive threat of new market entrants, especially in the contract delivery business; the migration of consumers and businesses from printed to digital media and communications with the resultant reduction in sales of office supplies and the need to successfully expand other products and services sold at acceptable margins; the ability to shrink the Company's excess retail presence while maintaining acceptable profitability levels; and the various additional risks and uncertainties that are described in the Company's most recent annual report on Form 10-K filed with the SEC;

    the possible alternatives to a sale of the entire Company, including continuing as a standalone company and spinning off or selling certain of our business lines, which alternatives the Board evaluated with the assistance of its outside legal and financial advisors and determined did not present the best reasonably available alternative for our stockholders in light of, among other factors, the potential risks, rewards and uncertainties associated with those alternatives;

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      the Board's belief that its negotiations had resulted in the highest price per share for the Company common stock that Parent was willing to pay; and

      the Board's belief that the process conducted by the Company had resulted in the highest price reasonably available to the stockholders of the Company.

    Attractive Value.  The Board concluded that the consideration of $10.25 per share represented an attractive valuation for the Company and an opportunity for the Company's stockholders to receive a significant premium over the market price of the Company common stock. The Board reviewed the historical market prices, volatility and trading information with respect to the Company common stock, and the active sale process undertaken by the Company, including:

    the fact that the $10.25 per share price to be paid in cash in respect of each share of Company common stock represents an approximately 18% premium to the closing price per share of the Company's common stock on April 3, 2017, the last full trading day before widespread media speculation about a potential acquisition of the Company, and an approximately 20% premium to the volume weighted average price per share of the Company's common stock for the 10-day period ended April 3, 2017;

    the fact that Barclays and Morgan Stanley, at the Board's instruction, contacted five prospective financial buyers, and were contacted by two additional prospective financial buyers, regarding a potential acquisition, that of these prospective buyers, only four parties (including Sycamore) conducted preliminary due diligence, and that no other party was willing to continue pursuing an acquisition of the Company after conducting preliminary due diligence;

    the fact that the Company had preliminary discussions with Party A, a potential strategic buyer, regarding the sale of our U.S. retail business, and that such discussions had led to a preliminary non-binding indication of interest for the acquisition of such business that was subject to numerous conditions and uncertainties, including the completion of due diligence, which the Board evaluated with the assistance of outside legal and financial advisors and determined was less favorable to our stockholders than the merger in light of, among other factors, (i) the greater certainty of consummation and value the merger would provide to our stockholders, particularly in light of the preliminary nature of the discussions and the financial, operational and regulatory risks associated with a sale of our U.S. retail business to Party A, (ii) the competitive and other effects of a sale of our U.S. retail business to Party A on our remaining business, (iii) the numerous complexities and challenges presented by a separation of our retail and contract delivery businesses, (iv) the one-time and ongoing incremental costs that would have likely resulted from a separation of our retail and contract delivery businesses and the adverse impact thereof on the resulting value to our stockholders, and (v) the risks and uncertainties of continuing to operate the Company's remaining business as a stand-alone company, including those arising from challenging market conditions and trends, the secular decline in office products sales, the channel shift from retail to online sales and increased competition;

    the fact that the Company had not received any other substantive alternative acquisition proposals, despite widespread speculation in press and analyst reports since early April 2017, including The Wall Street Journal article published on April 4, 2017, that the Company was considering a sale;

    the fact that the Company actively solicited increases in the offer made by Parent and Parent indicated that the merger consideration was its best and final offer;

    the fact that there were restrictions on the ability of Sycamore and the Company's management to enter into any discussions or arrangements regarding the terms of

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        Company's management employment following the closing, including equity incentives, without the Board's consent, that the Committee notified management of such restrictions in writing and that such discussions have not taken place as of the date of this proxy statement; and

      the risk that prolonging the sale process further could have resulted in the loss of an opportunity to consummate a transaction with Parent and distracted senior management from implementing the Company's business plan.

    Greater Certainty of Value.  The proposed consideration consists solely of cash, which provides immediate liquidity and certainty of value to our stockholders. The receipt of cash consideration also eliminates for our stockholders the risk of the continued execution of our business on a stand-alone basis.

    Business Reputation of Sycamore.  The Board considered the business reputation, management and financial resources of Sycamore, with respect to the transaction. The Board believed these factors supported the conclusion that a transaction with affiliates of Sycamore could be completed relatively quickly and in an orderly manner.

    Relationships with Financial Advisors.  The determination of the Board that the relationships between each of Barclays and Morgan Stanley, on the one hand, and each of the Company and Sycamore, on the other hand, would not impair the ability of either Barclays or Morgan Stanley to provide impartial advice to the Board and the fact that Barclays and Morgan Stanley each agreed at the outset of its engagement with the Company that it would not finance an acquisition of the Company without the Company's consent.

    Likelihood of Completion.  The likelihood that the merger will be consummated, particularly in view of the terms of the merger agreement and the closing conditions. In that regard, the Board noted:

    the fact that Parent and Merger Sub had obtained committed debt and equity financing for the transaction, the limited number and nature of the conditions to the debt and equity financing, the reputation of the financing sources and the obligation of Parent to use its reasonable best efforts to obtain the debt financing, each of which, in the reasonable judgment of the Board, increases the likelihood of such financings being completed;

    that the merger is not subject to any financing-related condition;

    the limited number of conditions to the merger and the fact that certain of the Company's obligations in the merger agreement, including its obligations to cooperate with the carveout transactions and the repatriation of foreign cash, will not be taken into account for purposes of determining whether the closing condition regarding the Company's compliance with its covenants has been satisfied;

    the fact that the merger agreement provides that, in the event of a failure of the merger to be consummated under certain circumstances, Parent will pay the Company a $343,000,000 reverse termination fee, without the Company having to establish any damages, and the guarantee of such payment obligation pursuant to the limited guarantee;

    the Company's ability, under certain circumstances pursuant to the merger agreement and the equity commitment letters, to seek specific performance of Parent's obligation to cause the equity commitment to be funded; and

    the relative likelihood of obtaining required regulatory approvals and Parent's obligation to effect remedies to obtain antitrust approvals.

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    Receipt of Opinions from Barclays and Morgan Stanley.  The financial analyses presented to the Board by Barclays and Morgan Stanley, as well as:

    the opinion of Barclays, dated June 28, 2017, to the effect that, as of that date and based upon and subject to the qualifications, factors, limitations and assumptions set forth therein, from a financial point of view, the $10.25 per share in cash to be offered to the holders of shares of Company common stock (other than holders of excluded shares) is fair to such holders, as more fully described below in "The Merger—Opinions of the Company's Financial Advisors" beginning on page [—] and the full text of such opinion is attached to this proxy statement as Annex B.

    the opinion of Morgan Stanley, dated June 28, 2017, to the effect that, as of that date and based upon and subject to the qualifications, factors, limitations and assumptions set forth therein, the $10.25 per share in cash to be received by the holders of shares of Company common stock (other than holders of excluded shares) pursuant to the merger agreement is fair, from a financial point of view, to such holders, as more fully described below in "The MergerOpinions of the Company's Financial Advisors" beginning on page [—] and the full text of such opinion is attached to this proxy statement as Annex C.

    Terms of Merger Agreement.  The terms and conditions of the merger agreement, including the Company's ability to consider and respond to, under certain circumstances specified in the merger agreement, an unsolicited written acquisition proposal (as more fully described under the heading "The Merger Agreement—Restrictions on Solicitation of Other Offers"), and the Board's right, after complying with the terms of the merger agreement, to terminate the merger agreement in order to enter into an agreement with respect to a superior proposal (as more fully described under the heading "The Merger Agreement—Restrictions on Changes of Recommendation to Company Stockholders"), subject to certain match rights in favor of Parent and upon payment of a termination fee to Parent of $171,000,000, which is approximately 2.5% of the equity value of the Company, as described under "The Merger Agreement—Termination Fees" beginning on page [—].

    Required Stockholder Approval.  The merger agreement is subject to adoption by the Company's stockholders, who are free to reject the merger agreement.

    Appraisal Rights.  The Board considered the fact that stockholders who properly exercise and perfect their appraisal rights under Delaware law will be entitled to such appraisal rights in connection with the merger.

        The Board also weighed the factors described above against the following factors and risks that generally weighed against entering into the merger agreement (which factors and risks are not necessarily presented in order of relative importance):

    No Stockholder Participation in Future Growth or Earnings.  The Company will no longer exist as an independent company, and accordingly, Company stockholders will no longer participate in any future growth the Company may have or any potential future increase in its value.

    Effect of Failure to Complete Transactions.  While the Company expects that the merger will be consummated, there can be no assurance that all conditions to the parties' obligations to complete the merger will be satisfied, and thus it is possible that the merger may not be completed in a timely manner or at all. If the merger is not completed, (i) the Company will have incurred significant risk and transaction and opportunity costs, including the possibility of disruption to our operations, diversion of management and employee attention, employee attrition and a potentially negative effect on our business and customer and supplier relationships, (ii) the trading price of shares of Company common stock would likely be adversely affected and (iii) the market's perceptions of the Company's prospects could be adversely affected.

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    Closing Conditions.  The fact that completion of the merger would require antitrust clearance in the United States and the satisfaction of certain other closing conditions, including that no Company material adverse effect has occurred, which conditions are not entirely within the Company's control and that there can be no assurances that any or all such conditions will be satisfied.

    Risk Associated with Financing.  The risk that the merger might not be consummated in a timely manner or at all, including the risk that the merger will not occur if the financing contemplated by the equity and debt commitments, described under the caption "The Merger—Financing of the Merger", is not obtained, as Parent does not on its own possess sufficient funds to consummate the merger.

    Interim Restrictions on Business.  The Company's management's focus and resources may become diverted from other important business opportunities and operational matters while working to implement the merger, and the merger agreement imposes restrictions on the conduct of the Company's business prior to the effective time of the merger, which could adversely affect the Company's business.

    Risk of Litigation.  There is a risk of litigation arising in respect of the merger agreement or the transactions contemplated by the merger agreement.

    Taxable Consideration.  The merger will be a taxable transaction to the Company's stockholders that are U.S. holders (as defined under the heading "—U.S. Federal Income Tax Consequences of the Merger" below) for U.S. federal income tax purposes and, therefore, such stockholders generally will be required to pay U.S. federal income tax on any gains they recognize as a result of the merger.

    No Solicitation.  The terms of the merger agreement prohibit the Company and its representatives from soliciting third party bids and Parent has the right to match an unsolicited third party bid if made, which terms could reduce the likelihood that other potential acquirers would propose an alternative transaction that may be more advantageous to our stockholders.

    Termination Fee and Expense Reimbursement.  The possibility that if the merger is not consummated, subject to certain limited exceptions, we will be required to pay our own expenses associated with the merger agreement and the transactions contemplated thereby and, under certain circumstances, to pay Parent a termination fee of $171,000,000 or expense reimbursement of up to $15,000,000 in connection with the termination of the merger agreement.

    Parent and Merger Sub.  The fact that Parent and Merger Sub are newly formed corporations with no assets other than the equity commitment letters and the debt commitment letter, and that our remedy in the event of breach of the merger agreement by Parent or Merger Sub may be limited to receipt of the reverse termination fee from the funds, on a several basis, in an aggregate amount of $343,000,000, and that, under certain circumstances, we may not be entitled to a reverse termination fee at all.

    Suspension of Dividend.  The fact that the Company was restricted from paying its $0.12 per share quarterly cash dividend following the dividend paid on July 13, 2017, until the closing of the merger.

        In considering the recommendation of the Board with respect to the proposal to adopt the merger agreement, you should be aware that our directors and executive officers may have interests in the merger that are different from, or in addition to, yours. The Board was aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement and the merger, and in their recommendations with respect to the merger agreement. See the section entitled "The Merger—Interests of Certain Persons in the Merger" beginning on page [—].

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        The foregoing discussion of the information and factors considered by the Board in reaching its conclusions and recommendations is not intended to be exhaustive, but includes the material factors considered by the directors. In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the Board did not find it practicable to, and did not attempt, to quantify, rank or assign any relative or specific weights to the various factors considered in reaching its determination and making its recommendation. In addition, individual directors may have given different weights to different factors. The Board considered all of the foregoing factors as a whole and based its recommendation on the totality of the information presented.

        The Board recommends that you vote "FOR" approval of the proposal to adopt the merger agreement, "FOR" approval of the nonbinding advisory proposal regarding "golden parachute" compensation and "FOR" approval of the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Opinions of the Company's Financial Advisors

Opinion of Barclays Capital Inc.

        The Company engaged Barclays to act as its financial advisor with respect to pursuing strategic alternatives for the Company, including a possible merger, sale or other strategic business combination of the Company (including the merger) and other extraordinary transactions that could be entered into as an alternative to such events. On June 28, 2017, Barclays rendered its oral opinion, which opinion was subsequently confirmed in a written opinion, dated June 28, 2017, to the Board, to the effect that, as of that date and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limits upon the review undertaken by Barclays as stated in its written opinion, the merger consideration of $10.25 per share of the Company common stock to be offered to the stockholders of the Company (other than holders of excluded shares) in the merger was fair, from a financial point of view, to such stockholders.

        The full text of Barclays' written opinion, dated as of June 28, 2017, is attached as Annex B to this proxy statement. Barclays' written opinion sets forth, among other things, the assumptions made, procedures followed, factors considered and qualifications and limitations upon the review undertaken by Barclays in rendering its opinion. The Company encourages you to read the opinion carefully in its entirety. The following is a summary of Barclays' opinion. This summary is qualified in its entirety by reference to the full text of the opinion.

        Barclays' opinion, the issuance of which was approved by Barclays' Valuation and Fairness Opinion Committee, is addressed to the Board, addresses only the fairness, from a financial point of view, of the merger consideration of $10.25 per share of the Company common stock to be offered to the stockholders of the Company (other than holders of excluded shares), and does not constitute a recommendation to any stockholder of the Company as to how such stockholder should vote with respect to the merger or any other matter. The terms of the merger were determined through arm's-length negotiations between the Company and Parent and were approved by the Board. Barclays did not recommend any specific amount or form of consideration to the Company or that any specific amount or form of consideration constituted the only appropriate consideration for the merger. Barclays was not requested to opine as to, and its opinion does not in any manner address, the Company's underlying business decision to proceed with or effect the merger or the likelihood of the consummation of the merger. Barclays' opinion did not address the relative merits of the merger as compared to any other transaction or business strategy in which the Company might engage. In addition, Barclays expressed no opinion on, and its opinion does not in any manner address, the fairness of the amount or the nature of any compensation to any officers, directors or employees of any parties to the merger, or any class of such persons, relative to the merger consideration of $10.25 per

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share of the Company's common stock to be offered to the stockholders of the Company in the merger. No limitations were imposed by the Board upon Barclays with respect to the investigations made or procedures followed by it in rendering its opinion.

        In arriving at its opinion, Barclays, among other things:

    reviewed and analyzed a draft of the merger agreement, dated as of June 28, 2017, and the specific terms of the merger;

    reviewed and analyzed publicly available information concerning the Company that Barclays believed to be relevant to its analysis, including its Annual Report on Form 10-K for the fiscal year ended January 28, 2017 and Quarterly Report on Form 10-Q for the fiscal quarter ended April 29, 2017;

    reviewed and analyzed financial and operating information with respect to the business, operations and prospects of the Company furnished to Barclays by the Company, including financial forecasts (the "Forecasts") of the Company prepared by management of the Company;

    reviewed and analyzed a trading history of the common stock of the Company from June 27, 2014 to June 27 2017 and a comparison of that trading history with those of other companies that Barclays deemed relevant;

    reviewed and analyzed a comparison of the historical financial results and present financial condition of the Company with those of other companies that Barclays deemed relevant;

    reviewed and analyzed a comparison of the financial terms of the merger with the financial terms of certain other transactions that Barclays deemed relevant;

    reviewed and analyzed the results of Barclays' efforts to solicit indications of interest from third parties with respect to a sale of the Company;

    reviewed and analyzed published estimates of independent research analysts with respect to the future financial performance and price targets of the Company;

    had discussions with the management of the Company concerning its business, operations, assets, liabilities, financial condition and prospects; and

    undertook such other studies, analyses and investigations as Barclays deemed appropriate.

        In arriving at its opinion, Barclays assumed and relied upon the accuracy and completeness of the financial and other information used by Barclays without any independent verification of such information (and did not assume responsibility or liability for any independent verification of such information). Barclays also relied upon the assurances of management of the Company that they were not aware of any facts or circumstances that would make such information inaccurate or misleading in any material respect. With respect to the Forecasts of the Company, upon the advice of the Company, Barclays assumed that such Forecasts were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of the Company as to the future financial performance of the Company and that the Company will perform substantially in accordance with such Forecasts. In arriving at its opinion, Barclays assumed no responsibility for and expressed no view as to any such forecasts or estimates or the assumptions on which they were based. In arriving at its opinion, Barclays did not conduct a physical inspection of the properties and facilities of the Company and did not make or obtain any evaluations or appraisals of the assets or liabilities of the Company. Barclays' opinion was necessarily based upon market, economic and other conditions as they existed on, and could be evaluated as of, the date of its opinion. Barclays assumed no responsibility for updating or revising its opinion based on events or circumstances that may have occurred after June 28, 2017.

        Barclays assumed that the executed merger agreement would conform in all material respects to the last draft reviewed by Barclays. In addition, Barclays assumed the accuracy of the representations and warranties contained in the merger agreement and all agreements related thereto. Barclays also

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assumed, upon the advice of the Company, that all material governmental, regulatory and third party approvals, consents and releases for the merger would be obtained within the constraints contemplated by the merger agreement and that the merger would be consummated in accordance with the terms of the merger agreement without waiver, modification or amendment of any material term, condition or agreement thereof. Barclays understood that Parent received draft equity commitment letters from funds managed by Sycamore and Neuberger Berman Private Equity and investment funds affiliated with HarbourVest Partners (the funds managed by Neuberger Berman Private Equity and affiliated with HarbourVest Partners collectively referred to as, the "Co-Investors"), each dated June 28, 2017, as applicable, and draft debt commitment letters from certain lenders dated June 28, 2017 (collectively the "financing letters"). Barclays expressed no opinion with respect to the terms of the equity or debt commitment letters or the availability of the financing contemplated thereby. Barclays did not express any opinion as to any tax or other consequences that might result from the merger, nor does its opinion address any legal, tax, regulatory or accounting matters, as to which Barclays understood that the Company had obtained such advice as it deemed necessary from qualified professionals.

Opinion of Morgan Stanley & Co. LLC

        The Company retained Morgan Stanley to provide it with financial advisory services in connection with a possible merger, sale or other strategic business combination of the Company or a similar transaction. As part of such engagement, the Board requested that Morgan Stanley evaluate the fairness, from a financial point of view, to the holders of the shares of the Company's common stock of the $10.25 per share merger consideration to be received pursuant to the merger agreement. Morgan Stanley rendered to the Board at its meeting on June 28, 2017 Morgan Stanley's oral opinion, subsequently confirmed by delivery of a written opinion, dated June 28, 2017, that, as of such date, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken by Morgan Stanley as set forth in its written opinion, the $10.25 per share merger consideration to be received by the holders of shares of the Company common stock (other than holders of excluded shares) pursuant to the merger agreement was fair, from a financial point of view, to such holders. Morgan Stanley's opinion did not address the relative merits of the merger as compared to any other alternative business transaction, or other alternatives, or whether or not such alternatives could be achieved or are available.

        The full text of the written opinion of Morgan Stanley delivered to the Board, dated June 28, 2017, is attached as Annex C. The opinion sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken by Morgan Stanley in rendering its opinion. The Company's stockholders are urged to, and should, read the opinion carefully and in its entirety. Morgan Stanley's opinion is directed to the Board and addresses only the fairness, from a financial point of view, to the Company's stockholders of the $10.25 per share merger consideration to be received by such holders pursuant to the merger agreement as of the date of the opinion. Morgan Stanley's opinion does not address any other aspect of the transactions contemplated by the merger agreement and does not constitute a recommendation to the Company's stockholders as to how to vote at the special meeting held in connection with the merger. The summary of Morgan Stanley's opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of Morgan Stanley's opinion.

        For purposes of rendering its opinion, Morgan Stanley, among other things:

    reviewed certain publicly available financial statements and other business and financial information of the Company;

    reviewed certain internal financial statements and other financial and operating data concerning the Company;

    reviewed the Forecasts prepared by the management of the Company;

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    discussed the past and current operations and financial condition and the prospects of the Company with senior executives of the Company;

    reviewed the reported prices and trading activity for the shares of common stock of the Company;

    compared the financial performance of the Company and the prices and trading activity of the shares of common stock of the Company with that of certain other publicly traded companies comparable with the Company and their securities;

    reviewed the financial terms, to the extent publicly available, of certain comparable acquisition transactions;

    participated in certain discussions and negotiations among representatives of the Company and Parent and their legal advisors;

    reviewed a draft of the merger agreement dated as of June 28, 2017, the financing letters and certain related documents; and

    performed such other analyses, reviewed such other information and considered such other factors as Morgan Stanley deemed appropriate.

        In arriving at its opinion, Morgan Stanley assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to it by the Company, and formed a substantial basis for its opinion. With respect to the Forecasts, Morgan Stanley assumed that such Forecasts had been reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company at the time prepared of the future financial performance of the Company. In addition, Morgan Stanley assumed that the merger would be consummated in accordance with the terms set forth in the merger agreement without any waiver, amendment or delay of any terms or conditions, including, among other things, that Parent would obtain financing in accordance with the terms indicated in the financing letters and expressed no opinion with respect to the terms of the financing letters or the availability of the financing contemplated thereby, and that the final merger agreement did not differ in any material respects from the last draft of the merger agreement which was reviewed by Morgan Stanley. Morgan Stanley assumed that, in connection with the receipt of all the necessary governmental, regulatory or other approvals and consents required for the merger, no delays, limitations, conditions or restrictions would be imposed that would have a material adverse effect on the contemplated benefits expected to be derived in the merger. Morgan Stanley is not a legal, tax or regulatory advisor. Morgan Stanley is a financial advisor only and relied upon, without independent verification, the assessment of the Company and its legal, tax or regulatory advisors with respect to legal, tax or regulatory matters. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of the Company's officers, directors or employees, or any class of such persons, relative to the merger consideration to be received by the Company's stockholders in the transaction. Morgan Stanley did not make any independent valuation or appraisal of the assets or liabilities of the Company, nor was it furnished with any such valuations or appraisals. Morgan Stanley's opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to it, as of June 28, 2017. Events occurring after such date may affect Morgan Stanley's opinion and the assumptions used in preparing it, and Morgan Stanley did not assume any obligation to update, revise or reaffirm its opinion. Morgan Stanley's opinion was approved by a committee of Morgan Stanley investment banking and other professionals in accordance with its customary practice. Morgan Stanley did not recommend any specific amount or form of consideration to the Company or that any specific amount or form of consideration constituted the only appropriate consideration for the merger. No limitations were imposed by the Board upon Morgan Stanley with respect to the investigations made or procedures followed by it in rendering its opinion.

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Summary of Financial Analyses

        The following is a summary of the material financial analyses prepared by Morgan Stanley and Barclays (referred to as the "financial advisors") in connection with the rendering of the financial advisors' respective oral opinions, subsequently confirmed by delivery of respective written opinions, dated June 28, 2017, to the Board and reviewed with the Board on June 28, 2017. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. The financial advisors arrived at their respective opinions based on the results of all analyses undertaken and assessed as a whole, and they did not ascribe a specific range of values to the shares of the Company common stock or draw, in isolation, conclusions from or with regard to, and did not attribute any particular weight to, any one factor or method of analysis, but rather made qualitative judgments as to the significance and relevance of each analysis and factor relative to all other analyses and factors performed and considered by them and in the context of the circumstances of the particular transaction. Accordingly, the summary set forth below does not purport to be a complete description of the financial analyses performed or factors considered by, and underlying the opinions of, the financial advisors, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by either of the financial advisors. The analyses listed in the tables and described below must be considered as a whole; considering any portion of such analyses and of the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying the financial advisors' respective opinions. In addition, in rendering their opinions, the financial advisors may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of implied valuations resulting from any particular analysis described below should not be taken to be Morgan Stanley's or Barclays's view of the actual value of the Company.

        In performing their financial analyses, summarized below, the financial advisors considered industry performance, general business, economic, market and financial conditions and other matters existing as of the date of their respective opinions, many of which are beyond Morgan Stanley's, Barclays' and the Company's control. The assumptions and estimates contained in the financial analyses and the ranges of implied valuations resulting from any particular analysis are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than those suggested by such analyses. In addition, financial analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold. Accordingly, the assumptions and estimates used in, and the results derived from, the financial analyses are inherently subject to substantial uncertainty.

        The type and amount of consideration payable in the merger was determined by Parent and the Company, rather than by any financial advisor, and was approved by the Board. The decision by the Company to enter into the merger agreement was solely that of the Board. As described above under "The Merger—Reasons for the Merger; Recommendation of the Board", the financial advisors' analyses were only one of the many factors considered by the Board in its evaluation of the merger and should not be viewed as determinative of the views of the Board or management with respect to the merger or the $10.25 per share merger consideration.

        Certain financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary as the tables alone do not constitute a complete description of the financial analyses. Please see Annex B and Annex C of this proxy statement for the full text of the opinions of Barclays and Morgan Stanley, respectively.

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Selected Comparable Trading Analysis

        The financial advisors reviewed certain financial information, valuation multiples and market trading data relating to the Company and selected publicly traded companies that each Company financial advisor believed, based on its experience with companies in the retail and distribution industries, to be similar to Company's current operations for purposes of this analysis. Financial data of the selected companies were reflected in FactSet Research Systems, Inc. consensus estimates, public filings and other publicly available information. Financial data of the Company was reflected in the Forecasts and share data was provided to the financial advisors by the Company management. "EV" refers to aggregate enterprise value, calculated as equity value, plus book value of total debt, plus non-controlling interest (as appropriate for the company being analyzed), less cash, cash equivalents and marketable securities. "EBITDA" refers to earnings before interest, taxes, depreciation and amortization as adjusted to exclude nonrecurring and other similar items and one-time charges. Certain of the foregoing terms are used throughout this summary of financial analyses.

        The financial advisors reviewed data, including EV as a multiple of estimated 2017 EBITDA (referred to as EV/2017E EBITDA), of the Company and each of the following selected publicly traded companies in the retail and distribution industries, the operations of which the financial advisors deemed similar for purposes of this analysis, based on their professional judgment and experience, to the Company:

    Retail Industry

    Best Buy Co., Inc.

    Dick's Sporting Goods, Inc.

    Bed, Bath and Beyond Inc.

    Office Depot, Inc.

    GameStop Corp.

    Barnes & Noble, Inc.

    Distribution Industry

    Pool Corp

    Cintas Corporation

    MSC Industrial Direct Co., Inc.

    Genuine Parts Company

    HD Supply Holdings, Inc.

    W.W. Grainger, Inc.

    Essendant Inc.

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        With respect to the selected comparable companies, the information the financial advisors presented to the Board included EV / 2017E EBITDA multiples:

Comparable Companies in the Retail Industry

Company
  EV / 2017E
EBITDA
 

Best Buy Co., Inc. 

    5.9x  

Dick's Sporting Goods, Inc. 

    5.0x  

Bed, Bath and Beyond Inc. 

    4.6x  

Office Depot, Inc. 

    4.1x  

GameStop Corp. 

    3.7x  

Barnes & Noble, Inc. 

    3.4x  

Median

    4.4x  

Comparable Companies in the Distribution Industry

Company
  EV / 2017E
EBITDA
 

Pool Corp

    18.1x  

Cintas Corporation(1)

    13.8x  

MSC Industrial Direct Co, Inc. 

    11.7x  

Genuine Parts Company

    11.1x  

HD Supply, Holdings Inc.(2)

    10.8x  

W.W. Grainger Inc. 

    9.3x  

Essendant Inc. 

    7.1x  

Median

    11.1x  

(1)
Pro forma for acquisition of G&K Services, Inc.

(2)
Pro forma for announced divestiture of Waterworks Operating Company LLC.

        Based on this analysis and their professional judgment and experience, the financial advisors derived a reference range of EV / 2017E EBITDA multiples of 4.5x to 6.5x and applied these multiples to estimated EBITDA for 2017 as reflected in the Forecasts.

        Based on the number of outstanding shares of the Company common stock on a fully-diluted basis as provided by the Company management and the Company's net debt, non-controlling interest as of April 29, 2017 as disclosed in the Company's public filings, the analysis indicated the implied equity value per share range for the Company common stock, rounded to the nearest $0.05, of $7.85 – $11.15 as compared to the $10.25 per share merger consideration.

        No company utilized in the selected comparable trading analysis is identical to the Company. In evaluating selected companies, the financial advisors made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the Company's and the financial advisors' control. These include, among other things, selected company growth, profitability and customer concentration, the impact of competition on the Company's businesses and the industry generally, industry growth and the absence of any adverse material change in the Company's financial condition and prospects or the industry, or in the financial markets in general. Mathematical analysis (such as determining the average or median) is not in itself a meaningful method of using selected company data.

Precedent Transactions Analysis

        The financial advisors performed a precedent transactions analysis, which is designed to imply a value of a company based on publicly available financial terms of selected transactions that involve companies in the retail and distribution sectors. Selected comparable transactions were selected based

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on the financial advisors' professional judgment and knowledge of the retail and distribution industries, the operations of which the financial advisors deemed similar for purposes of this analysis, based on their professional judgment and experience.

        For each transaction listed below, the financial advisors divided EV by the target company's EBITDA for the 12-month period prior to the announcement of the transaction (referred to as "LTM EBITDA").

Selected Precedent Transactions in the Retail Sectors

Date Announced
  Acquiror   Target   EV / LTM EBITDA  

February 3, 2016

  Lowe's Companies, Inc.   Rona Inc.     12.7x  

November 30, 2015

  Mattress Firm Inc.   Sleepy's     10.9x  

November 23, 2015

  CVC Capital and CPPIB   Petco Animal Supplies, Inc.     ~9.0x  

August 24, 2015

  Sycamore Partners   Belk, Inc.     6.2x  

December 15, 2014

  BC Partners   PetSmart Inc.     8.9x  

July 28, 2014

  Dollar Tree, Inc.   Family Dollar Stores, Inc.     11.6x  

February 19, 2014

  Signet Jewelers Ltd.   Zales     18.5x  

November 26, 2013

  Men's Wearhouse Inc.   Jos A. Bank Clothiers, Inc.     10.5x  

September 9, 2013

  Ares Management, CPPIB   Neiman Marcus     9.4x  

October 16, 2013

  Advance Auto Parts Inc.   General Parts Inc.     8.8x  

September 3, 2013

  Jarden Corporation   Yankee Candle     8.5x  

July 29, 2013

  Hudson Bay Company (HBC)   Saks Incorporated     10.8x  

February 20, 2013

  Office Depot, Inc.   OfficeMax     4.8x  

May 9, 2012

  Bed Bath & Beyond Inc.   Cost Plus World Market     12.6x  

May 2, 2012

  Ascena Retail Group   Charming Shoppes     9.8x  

October 11, 2011

  Ares Management   99 Cents Only Stores     9.0x  

June 29, 2011

  Leonard Green, CVC   BJ's Wholesale     6.8x  

December 23, 2010

  Leonard Green   Jo-Ann Stores     7.1x  

November 23, 2010

  Leonard Green, TPG   J. Crew Group     8.6x  

Median

            9.0x  

Selected Precedent Transactions in the Distribution Sectors

Date Announced
  Acquiror   Target   EV / LTM
EBITDA
 

June 6, 2017

  CD&R   Waterworks Operating Agreement LLC     10.5x  

July 30, 2015

  W.W. Grainger Inc.   Cromwell     11.0x (1)

March 27, 2015

  Platinum Equity   PrimeSource     7.9x  

August 11, 2014

  Anixter   Tri-ED     11.7x  

May 19, 2014

  CCMP   Hillman Group     10.8x  

August 15, 2011

  W.W. Grainger Inc.   Fabory     N/A  

April 22, 2010

  Oak Hill   Hillman Group     9.6x  

Median

            10.7x  

(1)
Assumed 10% EBITDA margin per announcement press release.

        Based on this analysis and their professional judgment, the financial advisors derived a reference range of EV/LTM EBITDA multiple of 5.0x to 7.0x and applied this range to the Company's projected estimated LTM EBITDA for 2017 as reflected in the Forecasts.

        Based on the number of outstanding Company shares on a fully diluted basis provided by the Company management and the Company's net debt, and non-controlling interest as of April 29, 2017 as disclosed in the Company's public filings, the analysis indicated the implied per share reference range for the Company common stock, rounded to the nearest $0.05, of $8.65 – $12.00.

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        No company or transaction utilized as a comparison in the selected precedent transactions analysis is identical to the Company, nor are the transactions identical to the merger. In evaluating the transactions described above, the financial advisors made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of the Company, such as the impact of competition on the business of the Company or the industry generally, industry growth and the absence of any adverse material change in the financial condition or property of the Company or the industry or in the financial markets in general. Accordingly, mathematical analysis, such as determining the average or median, is not in itself a meaningful method of using comparable transaction data.

Discounted Cash Flow Analysis

        Each of the financial advisors conducted a discounted cash flow analysis for the purpose of determining an implied equity value per share for the Company common stock. A discounted cash flow analysis is a method of evaluating an asset using estimates of the future cash flows generated by the asset and taking into consideration the time value of money with respect to those future cash flows by calculating their present value. For purposes of the discounted cash flow analysis, the financial advisors used "unlevered free cash flows," which refers to a calculation of the future cash flows of an asset without including in such calculation any debt servicing costs. For purposes of the foregoing calculation, stock-based compensation is treated as a cash expense. "Present value" refers to the current value of one or more future cash payments from an asset, which current value is referred to as that asset's cash flows, and is obtained by discounting those cash flows back to the present using a discount rate that takes into account estimates of risk, the opportunity cost of capital and other appropriate factors. "Terminal value" refers to the capitalized value of all cash flows from an asset for periods beyond the final forecast period.

        Each of the financial advisors performed a discounted cash flow analysis of the Company using information provided by the Company, including information contained in the Forecasts and public filings, to calculate ranges of the implied value of the Company as of the end of fiscal year 2016. Unlevered free cash flows was defined as earnings before interest and taxes, less taxes, plus depreciation and amortization, less capital expenditures, less increases in net working capital, less other cash flow items and acquisitions (in each case reflected in the Forecasts provided by the Company management to the financial advisors).

        Barclays calculated a range of implied values per share of the Company common stock using the estimated future unlevered free cash flows reflected in the Forecasts for the fiscal years 2017 through 2021 and a terminal value for the Company as of the end of fiscal year 2021, derived by applying a range of EV / LTM multiples of 4.5x to 6.5x, selected based on Barclays' professional judgment and experience, to the terminal year estimate of LTM EBITDA, as reflected in the Forecasts. To calculate an implied enterprise value for the Company, the unlevered free cash flows and the terminal value were discounted to the end of fiscal year 2016 using a range of discount rates from 8.91% and 10.21%, which range of discount rates was calculated based on Barclays' professional judgment and experience and an analysis of the weighted average cost of capital of the Company. Barclays then adjusted the total implied enterprise value ranges by the Company's total debt, non-controlling interest and cash and cash equivalents based on the consolidated balance sheet of the Company as of April 29, 2017 and divided the resulting implied total equity value ranges by the Company's fully diluted shares outstanding (calculated using the treasury stock method), all as provided by the Company management. This analysis indicated an implied per share reference range for the Company common stock of $9.38 – $12.40.

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        Morgan Stanley calculated a range of implied values per share of the Company common stock using the estimated future unlevered free cash flows reflected in the Forecasts for the fiscal years 2017 through 2021 and a terminal value for the Company as of the end of fiscal year 2021, derived by applying a range of EV / LTM multiples of 4.5x to 6.5x, selected based on Morgan Stanley's professional judgment, to the terminal year estimate of LTM EBITDA, as reflected in the Forecasts. To calculate an implied enterprise value for the Company, the unlevered free cash flows and the terminal value were discounted to end of fiscal year 2016 using a range of discount rates from 8.1% to 9.8%, which range of discount rates was calculated based on Morgan Stanley's professional judgment and experience and an analysis of the weighted average cost of capital of the Company. Morgan Stanley then adjusted the total implied enterprise value ranges by the Company's total debt, non-controlling interest and cash and cash equivalents based on the consolidated balance sheet of the Company as of April 29, 2017 and divided the resulting implied total equity value ranges by the fully diluted shares of the Company common stock outstanding (calculated using the treasury stock method), all as provided by the Company management. This analysis indicated an implied per share reference range for the Company common stock of $9.52 – $12.79.

        The financial advisors also calculated a range of implied values per share of the Company common stock using the data and methodologies described above, except that that the unlevered free cash flows and terminal values were discounted to the end of fiscal year 2016 using a range of discount rates from 8.5% to 10.5%, which represented an amalgamation of the weighted average cost of capital methodologies of the financial advisors. This analysis, which indicated an implied per share reference range for the Company common stock of $9.30 – $12.60 was provided to the Board for informational/reference purposes only and did not provide the basis for the rendering of the financial advisors' opinions.

Illustrative Leveraged Buyout Analysis

        The financial advisors performed a hypothetical leveraged buyout analysis to determine the prices at which a financial sponsor might effect a leveraged buyout of the Company. In preparing this analysis, the financial advisors utilized the projections set forth in the Forecasts. The financial advisors assumed (1) a transaction date of January 28, 2017 based on the consolidated balance sheet of the Company as of April 29, 2017, (2) a subsequent exit transaction by the financial sponsor at the end of fiscal year 2021, (3) a multiple of 4.00x of total debt to the Company's estimated 2017 adjusted EBITDA, as set forth in the Forecast and as adjusted with the consent of the Company to exclude the cost of stock-based compensation, (4) a range from 4.5x to 6.5x of EV to 2021 EBITDA exit multiples and (5) target ranges of annualized internal rates of return for the financial sponsor of 20.0% to 25.0%. The financial advisors selected the leverage multiple, financing terms, exit multiples and target internal rates of return based upon the application of their professional judgment and experience. This analysis indicated an implied per share reference range for the Company common stock, rounded to the nearest $0.05, of $8.20 – $10.35.

Other Analyses

        The analyses and data described below were presented to the Board for informational/reference purposes only and did not provide the basis for, and were not otherwise material to, the rendering of the financial advisors' opinions.

    Historical Trading Range Analysis

        The financial advisors reviewed the historical trading range of shares of the Company common stock for the 52-week period ended June 27, 2017. The financial advisors noted that, during such period, the maximum closing price for the shares of the Company common stock was $10.01 and the minimum closing price for the shares of Company common stock was $7.28.

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        The financial advisors also reviewed the historical affected trading range of shares of the Company common stock for the period between April 4, 2017, which was the last trading day prior to public speculation of a potential sale of the Company, and June 27, 2017. The financial advisors noted that, during such period, the maximum closing price for shares of the Company common stock was $9.88 and the minimum closing price for shares of the Company common stock shares was $8.66.

        The historical trading ranges were presented for reference purposes only, and were not relied upon for valuation purposes.

    Analyst Price Targets

        The financial advisors reviewed publicly available equity research analysts per share price targets for shares of the Company common stock. The research analysts' one year per share price targets for the Company common stock ranged from approximately $8.00 to $12.00. The financial advisors also calculated the implied present value of the low and high one year per share price targets by applying a discount rate of 11.00%, representing an estimated cost of equity of the Company, to the $8.00 to $10.00 range of one year per share price targets (which excluded the analyst price targets derived using a sum of the parts methodology, the average of which, after applying a discount rate of 11.00%, would have yielded an illustrative implied equity value per share of the Company common stock of $10.35), which yielded a range of illustrative implied equity values per share of the Company common stock of $7.20 – $9.00 per share of the Company common stock. Morgan Stanley also calculated the implied present value of the low and high one year per share price targets by applying a discount rate of 10.1%, representing a midpoint estimated cost of equity of the Company, to the $8.00 – $10.00 range of one year per share price targets (which excluded the analyst price targets derived using a sum of the parts methodology, the average of which, after applying a discount rate of 10.1%, would have yielded an illustrative implied equity value per share of the Company common stock of $10.45), which yielded a range of illustrative implied equity values per share of the Company common stock of $7.27 – $9.08.

        The analysts' price targets were presented for reference purposes only, and were not relied upon for valuation purposes.

General

        Barclays is an internationally recognized investment banking firm and, as part of its investment banking activities, is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. The Board selected Barclays because of its qualifications, reputation and experience in the valuation of businesses and securities in connection with mergers and acquisitions generally.

        The Board retained Morgan Stanley based upon Morgan Stanley's qualifications, experience and expertise. Morgan Stanley is an internationally recognized investment banking and advisory firm. Morgan Stanley, as part of its investment banking and financial advisory business, is continuously engaged in the valuation of businesses and securities in connection with mergers and acquisitions, negotiated underwritings, competitive biddings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate, estate and other purposes.

        Barclays is acting as financial advisor to the Company in connection with the merger. As compensation for its services in connection with the merger, the Company agreed to pay Barclays a fee estimated to be approximately $26.5 million in the aggregate, $2.5 million of which was payable upon delivery of Barclays' opinion while the remainder is contingent upon consummation of the merger (calculated as a percentage of the aggregate consideration of a consummated transaction). In addition, the Company has agreed to reimburse Barclays' reasonable expenses and indemnify Barclays for certain liabilities that may arise out of its engagement and the rendering of Barclays' opinion. Barclays has

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performed various investment banking and financial services for the Company or its respective affiliates in the past, and expects to perform such services in the future, and has received, and expects to receive customary fees for such services. Specifically, in the past two years, Barclays has performed the following investment banking and financial services: (i) acted as financial advisor to the Company in connection with the terminated acquisition of Office Depot; (ii) acted as Lead Arranger and Joint Lead Bookrunner in connection with the financing for the terminated acquisition of Office Depot; (iii) acted as Joint Lead Arranger and Joint Bookrunner on the Company's Senior Secured Credit Facilities raised in April 2015; (iv) acted as Joint Lead Arranger on the Company's revolver refinancing in October 2016; and (v) acted as financial advisor to the Company in connection with the sale of its European assets in December 2016. In the past two years, Barclays has received compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to the Company and/or to its affiliates of approximately $12.9 million.

        In addition, Barclays and its affiliates in the past have provided, currently are providing, or in the future may provide, investment banking services to Sycamore, an affiliate of Parent, and certain of its affiliates and portfolio companies and have received or in the future may receive customary fees for rendering such services. However, Barclays has not in the past two years performed any investment banking services for which it has received any fees from Sycamore.

        In addition, Barclays and its affiliates in the past have provided, currently are providing or in the future may provide, investment banking services to Neuberger Berman, a Co-Investor, and certain of its affiliates and have received or in the future may receive customary fees for rendering such services. Specifically, in the past two years, Barclays has performed the following investment banking and financial services for certain affiliates of Neuberger Berman: (i) having acted as underwriter for various debt offerings, (ii) having performed various activities relating to hedging and credit origination and risk management services; and (iii) acting as a lender under a warehouse credit facility. In the past two years, Barclays has received compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to Neuberger Berman and/or to certain of its affiliates of approximately $2.6 million. Barclays has not in the past two years performed any investment banking services for HarbourVest Partners for which Barclays has received any fees. In the future Barclays and its affiliates may provide investment banking services for HarbourVest Partners and its affiliates or portfolio companies and may receive customary fees for rendering such services.

        Barclays Capital, its subsidiaries and its affiliates engage in a wide range of businesses from investment and commercial banking, lending, asset management and other financial and non-financial services. In the ordinary course of Barclays' business, Barclays and its affiliates may actively trade and effect transactions in the equity, debt and/or other securities (and any derivatives thereof) and financial instruments (including loans and other obligations) of the Company, Sycamore and the Co-Investors and certain of Sycamore's and the Co-Investors' respective portfolio companies and/or affiliates for Barclays' own account and for the accounts of Barclays' customers and, accordingly, may at any time hold long or short positions and investments in such securities and financial instruments.

        As compensation for its services relating to its engagement, the Company has agreed to pay Morgan Stanley a fee of approximately $26.5 million in the aggregate, $2.5 million of which was payable upon the rendering of its opinion and approximately $24 million of which is contingent upon the consummation of the merger (calculated as a percentage of the aggregate consideration of a consummated transaction). The Company has also agreed to reimburse Morgan Stanley for its reasonable expenses incurred in performing its services. In addition, the Company has agreed to indemnify Morgan Stanley and its affiliates, their respective directors, officers, agents and employees and each person, if any, controlling Morgan Stanley or any of its affiliates against certain liabilities and expenses, including certain liabilities under the federal securities laws, related to or arising out of Morgan Stanley's engagement. In the two years prior to the date of Morgan Stanley's opinion, in addition to the current engagement, Morgan Stanley and its affiliates have provided financial advisory

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and financing services to the Company and have received aggregate fees of between $3 million and $4 million in connection with such services. In the two years prior to the date of Morgan Stanley's opinion, Morgan Stanley and its affiliates have provided financial advisory and financing services to HarbourVest Partners and its respective affiliates and have received aggregate fees of between $1 million and $2 million in connection with such services. In the two years prior to the date of Morgan Stanley's opinion, Morgan Stanley and its affiliates have provided financial advisory and financing services to Neuberger Berman and its respective affiliates and have received aggregate fees of less than $1 million in connection with such services. In the two years prior to the date of Morgan Stanley's opinion, Morgan Stanley and its affiliates have not received any fees for any financial advisory or financing services provided to Sycamore. Morgan Stanley may also seek to provide financial advisory and/or financing services to Parent, the Company, Sycamore, the Co-Investors, and/or their respective affiliates on unrelated matters in the future and expects to receive fees for the rendering of these services.

        Morgan Stanley is a global financial services firm engaged in the securities, investment management and individual wealth management businesses. Its securities business is engaged in securities underwriting, trading and brokerage activities, foreign exchange, commodities and derivatives trading, prime brokerage, as well as providing investment banking, financing and financial advisory services. Morgan Stanley, its affiliates, directors and officers may at any time invest on a principal basis or manage funds that invest, hold long or short positions, finance positions, and may trade or otherwise structure and effect transactions, for their own account or the accounts of its customers, in debt or equity securities or loans of Parent and its affiliates, Sycamore, the Co-Investors and their respective affiliates, the Company or any other company, or any currency or commodity, that may be involved in this transaction, or any related derivative instrument. In addition, Morgan Stanley, its affiliates, directors or officers, including individuals working with the Company in connection with this transaction, may have committed and may commit in the future to invest in private equity funds managed by affiliates of Parent or any of the Co-Investors.

Company Financial Forecasts; Other Company Information

        The Company does not, as a matter of course, publicly disclose financial forecasts as to future financial performance, earnings or other results for extended periods due to, among other reasons, the inherent difficulty of accurately predicting future periods and the likelihood that the underlying assumptions and estimates may prove incorrect. While the Company prepares forecasts annually for internal budgeting and business planning purposes, such forecasts generally focus on the current fiscal year and the immediately following fiscal year.

        However, in connection with the evaluation of a possible transaction, we provided projections to our directors and their advisors as well as to prospective financial bidders, including Parent, Party B, Party C, Party D and Party E, in connection with their due diligence review of the Company. These projections contained certain non-public financial forecasts that were prepared by our management.

        A summary of the financial forecasts included in the projections has been included below. This summary is not being included in this document to influence your decision whether to vote for or against the proposal to adopt the merger agreement, but is being included because these financial forecasts were made available to our directors and their advisors as well as to prospective financial bidders. The inclusion of this information should not be regarded as an indication that our directors or their advisors, or any other person, considered, or now considers, such financial forecasts to be material or to be necessarily predictive of actual future results, and these forecasts should not be relied upon as such. Our management's internal financial forecasts, upon which the summary financial forecasts included below were based, are subjective in many respects. There can be no assurance that these financial forecasts will be realized or that actual results will not be significantly higher or lower than forecasted.

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        In addition, the financial forecasts were not prepared with a view toward public disclosure or toward complying with generally accepted accounting principles, which we refer to as GAAP, the published guidelines of the SEC regarding projections or the use of non-GAAP financial measures or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Neither our independent registered public accounting firm, nor any other independent accountants, have audited, compiled, examined or performed any procedures with respect to the financial forecasts contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability.

        These financial forecasts were based on numerous variables and assumptions that are inherently uncertain and may be beyond our control. We believe the assumptions that our management used as a basis for this projected financial information were reasonable, and that the bases on which the financial forecasts were prepared reflected the best currently available estimates and judgments of management of the future financial performance of the Company, at the time our management prepared these financial forecasts, given the information our management had at the time. Important factors that may affect actual results and cause these financial forecasts not to be achieved include, but are not limited to, risks and uncertainties relating to our business (including our ability to achieve strategic goals, objectives and targets over the applicable periods), industry performance, general business and economic conditions, the regulatory environment and other factors described in or referenced under "Cautionary Statement Concerning Forward-Looking Information" beginning on page [—] and "The Merger—Reasons for the Merger; Recommendation of the Board of Directors" beginning on page [—] and those risks and uncertainties detailed in the Company's public periodic filings with the SEC. In addition, the forecasts also reflect assumptions that are subject to change and do not reflect revised prospects for our business, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the financial forecasts were prepared. Accordingly, there can be no assurance that these financial forecasts will be realized or that our future financial results will not materially vary from these financial forecasts.

        No one has made or makes any representation to any stockholder regarding the information included in the financial forecasts set forth below. We have made no representation to Parent or Merger Sub in the merger agreement concerning these financial forecasts.

        We have not updated and do not intend to update or otherwise revise the financial forecasts to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions on which such forecasts were based are shown to be in error. In light of the foregoing factors and the uncertainties inherent in these projections, stockholders are cautioned not to place undue, if any, reliance on these projections.

        In preparing the financial forecasts our management made the following material assumptions:

    Delivery growth acceleration based on over $1 billion in mid-market sales growth between fiscal years 2016 and fiscal year 2020, driven by investments in sales force, pricing, memberships and continued growth in Pro Categories;

    "Tuck-in" acquisitions increasing North American Delivery sales by approximately $400 million by fiscal year 2020; and

    Implementation of approximately $425 million of net cost savings by fiscal year 2020, including reduction of direct vendor costs, own brand savings, discounting optimization, supply chain savings and other operating efficiencies.

        The estimates of EBITDA, adjusted EBITDA, unlevered free cash flow and unlevered cash flow constitute non-GAAP financial measures within the meaning of applicable rules and regulations of the SEC. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by the Company may not be comparable to similarly titled amounts used by other companies. The tables below include reconciliations of EBITDA, adjusted EBITDA, unlevered free cash flow and unlevered cash flow to the Company's EBIT forecasts.

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        The following is a summary of the financial forecasts for the Company prepared by our management and provided to our directors and their advisors as well as to prospective financial bidders, as described in the notes below:

Financial Forecasts(1)

(in millions)
  2017   2018   2019   2020   2021(2)   2022(2)   2023(2)  

Revenue(3)

  $ 17,329   $ 17,851   $ 18,104   $ 18,319   $ 18,569   $ 18,856   $ 19,183  

Adjusted EBITDA(4)

  $ 1,178   $ 1,258   $ 1,330   $ 1,358   $ 1,382   $ 1,407   $ 1,435  

EBITDA(5)

  $ 1,114   $ 1,194   $ 1,265   $ 1,294   $ 1,318     n/a     n/a  

Unlevered Free Cash Flow(6)

  $ 495   $ 520   $ 639   $ 711   $ 722     n/a     n/a  

Unlevered Cash Flow(7)

  $ 873   $ 966   $ 1,079   $ 1,131     n/a     n/a     n/a  

(1)
The Company provided financial forecasts to prospective financial bidders that differ from those shown in the table above in the manner described below. On March 13, 2017, after providing such financial forecasts to prospective financial bidders, the Company announced an agreement to sell its operations in Australia and New Zealand, which sale was subsequently completed on April 28, 2017. The amounts set forth in the table above, other than the unlevered cash flow amounts, were updated and provided to our directors and their advisors after the announced sale of the Australia and New Zealand operations to reflect the removal of amounts forecasted for the divested operations, but are otherwise consistent with the financial forecasts provided to prospective financial bidders (except as described in note 5 below).

(2)
The financial forecasts provided to prospective financial bidders did not include any forecasts for fiscal years 2021 through 2023. None of the financial forecasts, whether provided to prospective financial bidders or otherwise, included unlevered cash flow amounts beyond 2020 or EBITDA and unlevered free cash flow amounts for 2022 and 2023. The financial projections for fiscal years 2021 through 2023 were extrapolations prepared by management for Barclays' and Morgan Stanley's use in connection with their financial analyses, and were prepared assuming segment revenue growth and EBITDA margins for fiscal years 2021 through 2023 consistent with those projected for fiscal year 2020.

(3)
The revenue forecasts provided to prospective financial bidders reflected the following values (in millions), which include the Company's operations in Australia and New Zealand: (i) $18,061 for fiscal year 2016 (reflecting 10 months of actual results and forecasted amounts for the remaining 2 months), (ii) $17,952 for fiscal year 2017, (iii) $18,489 for fiscal year 2018, (iv) $18,759 for fiscal year 2019 and (v) $18,990 for fiscal year 2020. The amounts set forth in the table above have been adjusted solely to reflect the removal of the divested operations in Australia and New Zealand.

(4)
The financial forecasts provided to prospective financial bidders did not include forecasts of adjusted EBITDA. The adjusted EBITDA forecasts were prepared solely for purposes of the leveraged buyout analysis performed by Barclays and Morgan Stanley, described under "The Merger—Opinion of the Company's Financial Advisors—Summary of Financial Analyses" beginning on page [—], and do not reflect management's expectations regarding the actual results of operations of the Company under its stand-alone strategic plan. See "The Merger—Company Financial Forecasts; Other Company Information—Non-GAAP Reconciliation" beginning on page [—] for a description of the calculation of adjusted EBITDA.

(5)
The EBITDA forecasts provided to prospective financial bidders reflected the following values (in millions), which include the Company's operations in Australia and New Zealand: (i) $1,281 for fiscal year 2016 (reflecting 10 months of actual results and forecasted amounts for the remaining 2 months), (ii) $1,131 for fiscal year 2017, (iii) $1,217 for fiscal year 2018, (iv) $1,296 for fiscal year

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    2019 and (v) $1,330 for fiscal year 2020. The amounts set forth in the table above have been adjusted solely to reflect the removal of the divested operations in Australia and New Zealand and the correction of a clerical error, which correction was disclosed to Sycamore and resulted in an increase to EBITDA of approximately $8 million per year. See "The Merger—Company Financial Forecasts; Other Company Information—Non-GAAP Reconciliation" beginning on page [—] for a description of the calculation of EBITDA.

(6)
The unlevered free cash flow forecasts set forth in the table above were not provided to prospective financial bidders and reflect the removal of the divested operations in Australia and New Zealand. See "The Merger—Company Financial Forecasts; Other Company Information—Non-GAAP Reconciliation" beginning on page [—] for a description of the calculation of unlevered free cash flow.

(7)
The unlevered cash flow forecasts set forth in the table above were provided to prospective financial bidders, but were not used in the financial analyses performed by Barclays and Morgan Stanley. The unlevered cash flow forecasts in the table above include the Company's operations in Australia and New Zealand. In addition to the amounts set forth in the table above, the unlevered cash flow forecasts provided to prospective financial bidders included (in millions) $1,107 for fiscal year 2016 (reflecting 10 months of actual results and forecasted amounts for the remaining 2 months). See "The Merger—Company Financial Forecasts; Other Company Information—Non-GAAP Reconciliation" beginning on page [—] for a description of the calculation of unlevered cash flow.

Non-GAAP Reconciliation

        The following are summaries of the reconciliation of non-GAAP financial measures included in the financial forecasts to forecasted EBIT. The EBIT forecasts were not prepared with a view toward complying with GAAP, and the Company did not project, and the amounts in the tables below do not reflect, certain non-recurring expenses, such as impairment charges, losses on the sale of property and equipment and selling, general and administrative expenses related to strategic initiatives, that have historically been reflected in the Company's GAAP operating income. No other comparable financial measure was forecast with a view toward complying with GAAP, and such forecasts could not be made available without unreasonable effort.

(in millions)
  2017   2018   2019   2020   2021   2022   2023  

EBIT(1)

  $ 765   $ 852   $ 935   $ 979   $ 1,003   $ 1,028   $ 1,056  

Plus depreciation & amortization(2)

  $ 349   $ 342   $ 331   $ 315   $ 315   $ 315   $ 315  

EBITDA(3)

  $ 1,114   $ 1,194   $ 1,265   $ 1,294   $ 1,318   $ 1,343   $ 1,370  

Plus stock-based compensation expense

  $ 64   $ 64   $ 64   $ 64   $ 64   $ 64   $ 64  

Adjusted EBITDA

  $ 1,178   $ 1,258   $ 1,330   $ 1,358   $ 1,382   $ 1,407   $ 1,435  

(1)
The forecasts provided to prospective financial bidders reflected the following EBIT values (in millions): (i) $897 for fiscal year 2016 (reflecting 10 months of actual results and forecasted amounts for the remaining 2 months), (ii) $767 for fiscal year 2017, (iii) $860 for fiscal year 2018, (iv) $950 for fiscal year 2019 and (v) $1,000 for fiscal year 2020. See note 1 to the Financial Forecasts table for an explanation of these differences.

(2)
The forecasts provided to prospective financial bidders reflected the following depreciation & amortization values (in millions): (i) $385 for fiscal year 2016 (reflecting 10 months of actual results and forecasted amounts for the remaining 2 months), (ii) $364 for fiscal year 2017, (iii) $357 for fiscal year 2018, (iv) $346 for fiscal year 2019 and (v) $330 for fiscal year 2020. See note 1 to the Financial Forecasts table for an explanation of these differences.

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(3)
The forecasts provided to prospective financial bidders reflected the following EBITDA values (in millions): (i) $1,281 for fiscal year 2016 (reflecting 10 months of actual results and forecasted amounts for the remaining 2 months), (ii) $1,131 for fiscal year 2017, (iii) $1,217 for fiscal year 2018, (iv) $1,296 for fiscal year 2019 and (v) $1,330 for fiscal year 2020. See note 1 to the Financial Forecasts table for an explanation of these differences.
(in millions)
  2017   2018   2019   2020   2021  

EBIT

  $ 765   $ 852   $ 935   $ 979   $ 1,003  

Less tax expense(1)

  $ (256 ) $ (285 ) $ (313 ) $ (328 ) $ (336 )

Plus depreciation & amortization

  $ 349   $ 342   $ 331   $ 315   $ 315  

Less increase in working capital

  $ (17 ) $ (50 ) $ (27 ) $ (25 ) $ (29 )

Less capital expenditures

  $ (295 ) $ (258 ) $ (246 ) $ (230 ) $ (230 )

Less other cash flow items

  $ (50 )                

Less acquisitions

      $ (80 ) $ (40 )        

Unlevered Free Cash Flow

  $ 495   $ 520   $ 639   $ 711   $ 722  

(1)
The Company projected its tax expense by applying its reported non-GAAP effective tax rate of 33.5% for fiscal year 2016 to future years. The Company's GAAP effective tax rate for 2016 was 30.5%. The non-GAAP effective tax rate was calculated after excluding non-cash adjustments for the impairment of goodwill and long-lived assets, as well as certain non-recurring expenses.
(in millions)
  2017   2018   2019   2020  

EBIT

  $ 767   $ 860   $ 950   $ 1,000  

Plus depreciation & amortization

  $ 364   $ 357   $ 346   $ 330  

Less increase in working capital

  $ (21 ) $ (52 ) $ (30 ) $ (28 )

Less capital expenditures

  $ (300 ) $ (263 ) $ (251 ) $ (235 )

Plus stock-based compensation expense

  $ 64   $ 64   $ 64   $ 64  

Unlevered Cash Flow(1)

  $ 873   $ 966   $ 1,079   $ 1,131  

(1)
The unlevered cash flow forecasts were provided to prospective financial bidders, but were not used in the financial analyses performed by Barclays and Morgan Stanley. The forecasts in the table above include the Company's operations in Australia and New Zealand. In addition to the amounts set forth in the table above, the unlevered cash flow forecasts provided to prospective financial bidders included (in millions) $1,107 for fiscal year 2016 (reflecting 10 months of actual results and forecasted amounts for the remaining 2 months), which was calculated as follows: (i) $897 in EBIT, plus (ii) $385 in depreciation & amortization, less (ii) a $23 increase in working capital, less (iii) $260 in capital expenditures, plus (iv) $63 in stock-based compensation expense.

Other Company Information

        In addition to the financial forecasts summarized above, the Company's management provided our directors, their advisors and prospective financial bidders illustrative estimates of the potential upside opportunities of certain growth and profitability initiatives. These estimates reflected potential growth and profitability opportunities rather than management's or the Board's expectations regarding the performance of the business, were determined not to be indicative of the performance of the Company under its stand-alone strategic plan, and were deemed too speculative by the Board and management for inclusion in the Company's financial forecasts or a basis for the fairness opinions delivered by Barclays and Morgan Stanley. These illustrative estimates do not account for the expenses that would be incurred by the Company to implement these initiatives. The following are the illustrative estimates provided by the Company's management: (i) $715 to $790 million in incremental annual sales and $85

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to $100 million in incremental annual EBITDA that might result from incremental "tuck-in" acquisitions of businesses reflecting $750 million in annual sales (in addition to the "tuck-in" acquisitions increasing North American Delivery sales by approximately $400 million reflected in the financial forecasts); (ii) $390 to $430 million in incremental annual sales and $55 to $65 million in incremental annual EBITDA that might result from an increase in the fiscal year 2019 and 2020 growth rates among middle market customers from 12% (as reflected in the financial forecasts) to 20% annually; (iii) $380 to $420 million in incremental annual sales and $80 to $90 million in incremental annual EBITDA that might result from incremental growth among Corporate & Enterprise customers and Quill customers as an indirect effect of the middle market growth initiative described above; (iv) $350 to $500 million in incremental annual EBITDA that might result from $1.1 billion in gross cost savings if achieved by fiscal year 2020 (as compared to the $425 million in net cost savings achieved in the same period under the financial forecasts); and (v) $500 million in incremental annual sales and $75 million in incremental annual EBITDA that might result from potential growth initiatives in the Technology, Copiers & Printing, Shipping & Packaging Supplies and Powered by Staples business lines. These illustrative estimates also included $65 million in incremental annual EBITDA that might result from the elimination of stock-based compensation by a prospective purchaser.

        Our directors also reviewed three illustrative ranges of hypothetical values for a hypothetical sale of the Company's U.S. retail business ("USR") or the Company's North American retail business ("NAR") and the Company's continued operation and execution of the remainder of its business on a standalone basis, based upon, among other assumptions, assumed proceeds from a sale of USR and NAR, one-time and ongoing incremental costs to the sold and retained businesses resulting from the business separation and estimated 2017 EBITDA for the retained business, each as preliminarily estimated by Company management. The illustrative range of hypothetical total value to stockholders of the Company from a hypothetical sale of USR to Company A and continued operation of the remaining business (which would have included Canada retail and contract delivery) reviewed by our directors was $7.99 to $10.49 per share of Company common stock, and was based on, among other assumptions, the receipt by the Company of $500 million to $1.0 billion of gross cash proceeds from the sale of USR to Party A, ongoing annual incremental costs of $153 million to the Company's remaining business, one-time separation costs of $70 million, no tax leakage and the application of a hypothetical trading multiple for the remaining business of 6.0x to 7.5x to estimated 2017 EBITDA for the remaining business. The illustrative range of hypothetical total value to the stockholders of the Company from a hypothetical sale of USR to a financial buyer and continued operation of the remaining business (which would have included Canada retail and contract delivery) reviewed by our directors was $8.45 to $10.44 per share of Company common stock, and was based on, among other assumptions, the receipt by the Company of $375 million to $450 million of net cash proceeds from the sale of USR to a financial buyer, ongoing annual incremental costs of $92.5 million to the remaining business, no one-time separation costs or tax leakage and the application of a hypothetical trading multiple for the remaining business of 6.0x to 7.5x to estimated 2017 EBITDA for the remaining business. The illustrative range of hypothetical total value to stockholders of the Company from a hypothetical sale of NAR to a financial buyer and continued operation of the remaining business (which would have included contract delivery) reviewed by our directors, was $8.71 to $10.41 per share, and was based on, among other assumptions, the receipt by the Company of $1.2 billion to $1.4 billion of net cash proceeds from the sale of NAR, ongoing annual incremental costs of $92.5 million to the remaining business, no one-time separation costs or tax leakage and application of a hypothetical trading multiple for the remaining business of 7.0x to 8.5x to estimated 2017 EBITDA for the remaining business.

        The hypothetical valuation ranges were based on hypothetical transactions, highly illustrative and preliminary in nature, and, with the consent of the Board, were not part of the financial analyses performed by Barclays and Morgan Stanley in connection with their fairness opinions. The hypothetical valuation ranges also reflect numerous assumptions and estimates provided by Company management

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that are subject to significant uncertainty and were prepared solely to illustrate hypothetical values to Company stockholders from the hypothetical separation of the Company's business. The hypothetical ranges of values do not reflect actual alternative proposals made to the Company and, in the case of a sale of USR to Party A, reflect a range that significantly exceeds at the high end the preliminary valuations contained in the non-binding indications of interest Party A submitted to the Company. The execution of the hypothetical transactions also carried significant risks, including with respect to: (i) the uncertainty as to whether and, if so, at what price, Party A or any other potential acquirors would acquire USR or NAR; (ii) the ability to obtain the necessary regulatory approvals for a sale of USR in a timely fashion or at all; (iii) the competitive and other effects of a sale of USR to Party A on our remaining business; (iv) the numerous complexities and challenges presented by a separation of our retail and contract delivery businesses; (v) the fact that the one-time and ongoing incremental cost estimates from a separation of our retail and contract delivery businesses could exceed the preliminary management estimates utilized for purposes of hypothetical valuation ranges; and (v) the risks and uncertainties of continuing to operate the Company's remaining business as a stand-alone company, including those arising from challenging market conditions and trends, the secular decline in office products sales, the channel shift from retail to online sales and increased competition.

Financing of the Merger

        Parent estimates that the total amount of funds required to complete the merger and related transactions, including to pay fees and expenses in connection with the merger, is approximately $6.9 billion. Parent expects to fund this amount through a combination of:

    cash equity contributions from investment funds managed by Sycamore and Neuberger Berman Private Equity and investment funds affiliated with HarbourVest Partners of up to $1,920 million, which is described below under "—Financing of the Merger—Equity Financing;" and

    debt financing consisting of commitments for (i) a senior secured term loan facility in an aggregate principal amount of $2,400 million, (ii) an asset based revolving credit facility in an aggregate principal amount of $1,200 million, (iii) a senior unsecured bridge facility or senior unsecured notes in an aggregate principal amount of $1,600 million, (iv) an asset based revolving credit facility in an aggregate principal amount of $200 million and (v) an asset based revolving credit facility in an aggregate principal amount of $600 million, on terms and conditions set forth in the debt commitment letter. Parent has received firm commitments from certain financial institutions to provide the debt financing, which is described below under "—Financing of the Merger—Debt Financing."

        The consummation of the merger is not subject to a financing condition (although the funding of the debt and equity financing is subject to the satisfaction of the conditions set forth in the commitment letters under which the financing will be provided).

Equity Financing

        Parent has entered into letter agreements, dated June 28, 2017 (the "equity commitment letters"), pursuant to which investment funds managed by Sycamore and Neuberger Berman Private Equity and investment funds affiliated with HarbourVest Partners, which we refer to collectively as the funds, have agreed to contribute $1,385 million, $270 million and $265 million, respectively, for an aggregate amount equal to $1,920 million to Parent in exchange for equity securities of Parent (the "equity financing").

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        The funds' obligations to fund the equity financing contemplated by the equity commitment letters are generally subject to satisfaction of the following conditions:

    the marketing period has ended;

    the satisfaction, or express written waiver by Parent, of all conditions precedent to Parent's obligations to consummate the merger as set forth in the merger agreement (other than those conditions that by their nature are to be satisfied at the closing (but subject to such conditions being satisfied at the closing));

    the portion of the equity financing that is to be funded by the other funds pursuant to their respective equity commitment letters has been funded or will be funded substantially concurrently;

    the debt financing (including any alternative financing that has been obtained in accordance with the merger agreement) has been or will be funded in accordance with the terms thereof at the closing if (i) the equity financing is or were to be funded by the applicable fund and (ii) the equity commitments from the other funds are or were to be funded by such other funds; and

    the Company has irrevocably confirmed in writing to Parent that it stands ready, willing and able to consummate the merger.

        No fund is entitled to assert the condition described in the third bullet above unless another fund has refused in writing to fund its equity financing or has failed to fund its equity financing when required. In addition, the failure of the condition described in the third bullet above does not limit or impair Parent's or the Company's ability to enforce the obligations of such fund if and only if Parent (or the Company, as applicable) is also seeking enforcement of the equity commitment letters of other funds that have refused in writing to fund their portion of the equity financing (if any) or have failed to fund their equity financing when required (and the contemporaneous funding thereunder) or the other funds have satisfied or are prepared to satisfy their respective obligations to fund the commitments under their respective equity commitment letters.

        The funds' obligations to fund the equity financing will terminate upon the earliest to occur of:

    the valid termination of the merger agreement in accordance with its terms,

    the closing of the merger, if the equity financings have been funded in accordance with the terms of the equity commitments, or

    the Company or any of its affiliates asserting a claim against any of the funds or certain of its affiliates in connection with the equity commitment letter, the limited guarantee, the merger agreement or any transactions contemplated thereby other than claims permitted under the equity commitment letter, limited guarantee or the merger agreement.

        In no event will a fund have any obligation to fund its equity commitment at any time after such fund has made full payment of its guaranteed obligations under the terms of the limited guarantee as described below.

        The Company is an express third-party beneficiary of the equity commitment letter and has the right to specific performance to enforce each fund's obligations under its equity commitment letter solely to the extent the Company has the right to seek specific performance under the merger agreement to require Parent to cause the equity commitment under the equity commitment letter to be funded. Each fund may assign its obligation to fund any portion of the equity commitment to one or more of its affiliates, or to one or more other investors governed by one of its affiliates or affiliated funds, provided that such assignment will not relieve such assigning fund of its obligation to fund the full amount of its equity commitment.

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Debt Financing

        In connection with the entry into the merger agreement, Parent has obtained commitment letters from (A) UBS AG, Stamford Branch ("UBS"), UBS Securities LLC ("UBSS"), Bank of America, N.A. ("Bank of America"), Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Deutsche Bank AG New York Branch ("DBNY"), Deutsche Bank Securities Inc. ("DBSI"), Deutsche Bank AG Cayman Islands Branch ("DBCI"), Credit Suisse AG (acting through such of its affiliates or branches as it deems appropriate, "CS"), Credit Suisse Securities (USA) LLC ("CS Securities"), Royal Bank of Canada ("RBC"), RBC Capital Markets ("RBCCM"), Jefferies Finance LLC ("Jefferies Finance"), Fifth Third Bank ("Fifth Third" and, together with UBS, UBSS, Bank of America, Merrill Lynch, DBNY, DBSI, DBCI, CS, CS Securities, RBC, RBCCM, Jefferies Finance, the "Term Lenders" and the "Bridge Lenders"), Wells Fargo Bank, National Association ("Wells Fargo") and Wells Fargo Capital Finance Corporation Canada ("WFCFCC" and, together with Bank of America, Merrill Lynch and Wells Fargo, the "ABL Lenders;" the ABL Lenders and the Term/Bridge Lenders being collectively referred to as the "Lenders") (as amended from time to time in accordance with the merger agreement, the "debt commitment letter") pursuant to which the Lenders commit to provide, severally but not jointly, upon the terms and subject to the conditions set forth in the debt commitment letter, in the aggregate $6,000 million in debt financing (not all of which is expected to be drawn at the closing of the merger), consisting of (i) a senior secured term loan facility in an aggregate principal amount of $2,400 million provided by the Term Lenders (the "term loan facility"), (ii) an asset based revolving credit facility in an aggregate principal amount of $1,200 million (not all of which is expected to be drawn at the closing of the merger) provided by the ABL Lenders (the "NAD ABL facility"), (iii) a senior unsecured bridge facility in an aggregate principal amount of $1,600 million provided by the Bridge Lenders (the "bridge facility"), (iv) an asset based revolving credit facility in an aggregate principal amount of $200 million (not all of which is expected to be drawn at the closing of the merger) provided by the ABL Lenders (the "CAR ABL facility") and (v) an asset based revolving credit facility in an aggregate principal amount of $600 million (not all of which is expected to be drawn at the closing of the merger) provided by the ABL Lenders (the "USR ABL facility" and, together with the NAD ABL facility and the CAR ABL facility, the "ABL facilities"). We refer to the financing described above as the "debt financing."

        The aggregate principal amount of the term loan facility may be increased to fund certain original issue discount or upfront fees in connection with the debt financing. The proceeds of the debt financing will be used (i) to finance, in part, the payment of the amounts payable under the merger agreement, to repay our indebtedness outstanding as of the closing of the merger and the payment of related fees and expenses, (ii) to provide ongoing working capital and (iii) for capital expenditures and other general corporate purposes. The aggregate principal amount of the term loan facility funded on the closing date may be less than the aggregate principal amount of the term loan facility committed by the applicable Lenders in accordance with the terms and conditions set forth in the debt commitment letter.

        The debt financing contemplated by the debt commitment letter is conditioned on the consummation of the merger in accordance with the merger agreement, as well as other customary conditions, including, but not limited to:

    the execution and delivery by the borrowers and certain guarantors of definitive documentation consistent with the debt commitment letter;

    the accuracy of representations and warranties in the merger agreement as are material to the interests of the lenders under the term loan facility, bridge facility and the ABL facilities to the extent the inaccuracy of such representations and warranties would permit Parent to terminate the merger agreement or refuse to complete the merger, and the accuracy in all material respects of certain specified representations and warranties in the loan documents;

    the consummation of the equity financing prior to or substantially concurrently with the initial borrowing under the term loan facility;

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    the consummation of the repayment and termination of our existing Credit Agreement dated as of November 22, 2016 by and among us, certain of our affiliates, the lenders from time to time party thereto, the agents party thereto and Bank of America, N.A., as administrative agent;

    subject to certain limitations, the absence of any event, change, occurrence, condition, development, state of fact or circumstance since June 28, 2017 that would result in a material adverse effect;

    payment of all applicable costs, fees and expenses;

    delivery of certain audited, unaudited and pro forma financial statements;

    receipt by the lead arrangers under the debt commitment letter of documentation and other information about the borrowers and guarantors required under applicable "know your customer" and anti-money laundering rules and regulations (including the USA PATRIOT Act);

    subject to certain limitations, the execution and delivery of guarantees by the guarantors and the taking of certain actions necessary to establish and perfect a security interest in specified items of collateral; and

    the completion of a marketing period to syndicate the term loan facility prior to the closing date, such marketing period to be the first period of fifteen consecutive business days (subject to certain exceptions) after the date of the merger agreement commencing on the first business day after Parent shall have received certain financial information specified in the debt commitment letter which does not contain any untrue statement of a material fact regarding us or any of our subsidiaries or omit to state any material fact regarding us or any of our subsidiaries required to be stated therein or necessary in order to make such information, in light of the circumstances under which the statements contained in such information are made, not materially misleading.

        If any portion of the debt financing becomes unavailable on the terms and conditions contemplated by the debt commitment letter, Parent is required to promptly notify us in writing and use its reasonable best efforts to obtain substitute financing on terms and conditions not materially less favorable (including with respect to conditionality) to Parent and Merger Sub, taken as a whole, than the terms and conditions of the debt commitment letter (including the "flex" provisions contained in the fee letter referenced in the debt commitment letter) in an amount sufficient to enable Parent to consummate the merger and the other transactions contemplated by the merger agreement. As of the last practicable date before the printing of this proxy statement, the debt commitment letter remains in effect. The documentation governing debt financing contemplated by the debt commitment letter has not been finalized and, accordingly, the actual terms of the debt financing may differ from those described in this proxy statement.

        The Lenders may invite other banks, financial institutions and institutional lenders to participate in the debt financing contemplated by the debt commitment letter and to undertake a portion of the commitments to provide such debt financing.

Limited Guarantee

        Pursuant to the limited guarantee delivered by the funds in favor of the Company, dated June 28, 2017, each fund has agreed to, severally but not jointly, guarantee the due and punctual performance and discharge of such fund's respective percentage of the following (the "guaranteed obligations"):

    the obligation of Parent under the merger agreement to pay the Parent termination fee to the Company as and when due, and

    the expense reimbursement and indemnification obligations of Parent in connection with the costs and expenses incurred by the Company in connection with (x) any suit to enforce the

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      payment of the Parent termination fee and (y) the arrangement of the financing for the merger, the repatriation of certain foreign cash balances, actions with respect to the carveout transactions and actions with respect to the Company's outstanding senior notes, as and when due.

        The liability of each guarantor is several and not joint and the obligations of each guarantor under the limited guarantee are limited to such guarantor's pro rata percentage (as set forth for each guarantor in the limited guarantee) of the guaranteed obligations.

        Subject to certain exceptions, the guarantee will terminate upon the earliest of:

    the closing and the effective time of the merger,

    the payment and satisfaction in full of the guaranteed obligations, and

    the termination of the merger agreement in accordance with its terms in circumstances where the Parent termination fee does not become payable.

        The obligations of each of the guarantors will automatically expire six months after the valid termination of the merger agreement in circumstances under which the Parent termination fee is payable, unless a claim for payment of the funds' liability thereunder in respect of any of the obligations is brought pursuant to and in accordance with the guarantee prior to such expiration. In that case, the guarantee will terminate upon the satisfaction in full of the guaranteed obligations or a final, non-appealable judgment that the Company is not entitled to any amounts underlying the guaranteed obligations.

Closing and Effective Time of the Merger

        The closing of the merger will occur as soon as practicable (but in any event no later than the third business day) following the satisfaction or waiver of all of the closing conditions set forth in the merger agreement or at such other date as the parties may agree in writing; provided that, if the marketing period (described below) has not ended at such time, then, subject to the continued satisfaction or waiver of such closing conditions at such time, the closing shall occur instead on the earliest of (i) any business day during the marketing period as may be specified by Parent on no less than three business days' prior written notice to the Company, (ii) the third business day following the final day of the marketing period or (iii) such other date, time or place as agreed to in writing by Parent and the Company. The merger will become effective upon the filing of a certificate of merger with the Delaware Secretary of State or at such subsequent time or date as Parent and the Company may agree and specify in the certificate of merger. We intend to complete the merger as promptly as practicable, subject to receipt of the Company stockholder approval and satisfaction of the other closing conditions. Although we currently expect to complete the merger no later than December 2017, we cannot specify when or assure you that all conditions to the merger will be satisfied or waived.

Payment of Merger Consideration and Surrender of Stock Certificates

        Promptly, and in any event within five business days, after the effective time of the merger, a letter of transmittal will be mailed to each record holder of shares of Company common stock (other than the excluded shares) describing how such holder should surrender its shares of Company common stock for the per share merger consideration.

        You should not return your stock certificates with the enclosed proxy card, and you should not forward your stock certificates to the paying agent (described in the section entitled "The Merger Agreement—Payment Procedures" beginning on page [—]) without a letter of transmittal.

        If your shares of Company common stock are certificated, you will not be entitled to receive the per share merger consideration until you deliver a duly completed and executed letter of transmittal to

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the paying agent and you must also surrender your stock certificate, or certificates, to the paying agent. If your shares of Company common stock are held in book entry, which we refer to as uncertificated shares, surrender of any uncertificated shares will be effected in accordance with the paying agent's customary procedures with respect to securities that are uncertificated or represented by book entry and no holder of uncertificated shares will be required to deliver a certificate or an executed letter of transmittal to the paying agent in order to receive the merger consideration to which such holder is otherwise entitled under the merger agreement. If ownership of your shares is not registered in the transfer records of the Company, a check for any cash to be delivered will only be issued if the applicable letter of transmittal is accompanied by all documents reasonably required by the Company to evidence and effect such transfer and to evidence that any applicable stock transfer taxes have been paid.

        If you have lost a certificate, or if it has been stolen or destroyed, then before you will be entitled to receive the merger consideration, you will have to make an affidavit of the loss, theft or destruction and, if reasonably required by Parent, post a bond in such reasonable and customary amount as Parent may direct as indemnity against any claim that may be made against Parent with respect to such certificate. These procedures will be described in the letter of transmittal that you will receive, which you should read carefully in its entirety.

Interests of Certain Persons in the Merger

        In considering the recommendation of the Board with respect to the merger agreement, you should be aware that the Company's directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of our stockholders generally, as more fully described below. The Board was aware of these interests and considered them, among other matters, in reaching the determination that the terms and conditions of the merger and the merger agreement were advisable and in the best interests of the Company and its stockholders and that the terms of the merger were fair to the Company and the Company's stockholders and in making their recommendation regarding the adoption of the merger agreement as described in the section entitled "The Merger—Reasons for the Merger; Recommendation of the Board" beginning on page [—].

        Please see the section of this proxy statement entitled "The Merger—Golden Parachute Compensation" beginning on page [—] for additional information with respect to the compensation that our named executive officers and other executive officers may receive in connection with the merger.

Interests with Respect to Company Equity

Treatment of Company Stock Awards and the Employee Stock Purchase Plan

        Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, each then-outstanding and unexercised option to purchase shares of Company common stock with an exercise price per share equal to or greater than the per share merger consideration will be canceled, without any consideration being payable in respect thereof, and will have no further force or effect. Because the current exercise price per share of each outstanding Company stock option is equal to or greater than the merger consideration, all Company stock options will be canceled, without payment of any consideration therefor, and will have no further force or effect.

        Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, (i) each Company restricted stock unit that will become vested, by its terms, as a result of the closing of the merger will automatically be canceled and converted into the right to receive from the surviving corporation an amount of cash equal to the product of (A) the total number of shares of Company common stock then underlying such Company restricted stock unit multiplied by (B) the per share merger consideration, without any interest thereon

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and subject to all applicable withholding, with such amount payable promptly after the closing of the merger and (ii) each Company restricted stock unit that will not be vested, by its terms, on or before the closing of the merger will automatically be canceled and converted into the contingent right to receive from the surviving corporation an amount of cash equal to the product of (A) the total number of shares of Company common stock then underlying such Company restricted stock unit multiplied by (B) the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly following the earlier of (1) the date on which the original vesting conditions applicable to such underlying restricted stock unit, including and taking into account any accelerated vesting provisions set forth therein, are satisfied and (2) the date that is 180 days following the closing in each case, subject to the holder's continued service with the Company through the applicable date; provided that the 180 day period referenced in clause (2) is extended to the earlier of (x) the last day of the tenth month following the closing and (y) October 31, 2018, for certain Company restricted stock units granted in July 2017.

        Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, (i) each Company performance share award that is then outstanding and unvested and that is held by a former employee of the Company (as determined immediately prior to the effective time of the merger) will automatically be canceled and converted into the right to receive from the surviving corporation an amount of cash equal to the product of (A) the target number of shares of Company common stock subject to such Company performance share award, as pro-rated in accordance with the terms of the applicable Company performance share award agreement, multiplied by (B) the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly after the closing of the merger and (ii) each Company performance share award that is then outstanding and unvested and that is held by a person who is an employee of the Company immediately prior to the effective time of the merger will automatically be canceled and converted into the contingent right to receive from the surviving corporation an amount of cash equal to the product of (A) the target number of shares of Company common stock subject to such Company performance share award multiplied by (B) the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly following the earlier of (C) the date on which the original vesting conditions applicable to such performance share award, including and taking into account any accelerated vesting provisions set forth therein, are satisfied and (D) the date that is 180 days following the closing, in each case subject to the holder's continued service with the Company through the applicable date; provided that the merger consideration payable in respect of the Company performance share awards will be paid no later than March 15 of the calendar year following the calendar year in which the closing occurs.

        The exception to the above-described treatment of the equity awards that allows the holder and Parent to agree in writing to different treatment would allow for the implementation of management rollover arrangements if Parent and any applicable holders mutually agreed to such arrangements. However, no agreement or arrangement has been entered into or discussed in this regard.

        The Board has suspended the Company's employee stock purchase plan indefinitely effective as of July 1, 2017. The Board will terminate the employee stock purchase plan as of immediately prior to the effective time of the merger. During the period from the date of the merger agreement until the termination of the Company's employee stock purchase plan in accordance with the merger agreement, we will not permit any offering periods to occur.

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Security Holdings of Certain Persons

        The following table sets forth, as of July 17, 2017, for each person who has served as a director or executive officer of the Company since the beginning of our last fiscal year:

    the aggregate number of outstanding shares of Company common stock held directly and indirectly;

    the pre-tax value of such outstanding shares of Company common stock based on the $10.25 per share merger consideration;

    the aggregate number of Company restricted stock units held that may vest or otherwise be delivered in connection with the merger;

    the pre-tax value of such Company restricted stock units based on the $10.25 per share merger consideration;

    the aggregate number of Company performance share awards held that may vest or otherwise be delivered in connection with the merger (determined based on target performance, regardless of actual achievement of the performance metrics);

    the pre-tax value of such Company performance share awards based on the $10.25 per share merger consideration; and

    the aggregate pre-tax value of such shares of Company common stock, such Company restricted stock units and such Company performance share awards (which is the sum of the third, fifth and seventh columns below).

        The estimated aggregate amounts set forth in the third, fifth and seventh columns below equal the product of (i) the $10.25 per share merger consideration, multiplied by (ii) the total number of shares of Company common stock subject to each applicable award as described above. The following table assumes that the closing of the merger occurs on October 31, 2017, and the amounts shown do not attempt to forecast any grants, dividends, deferrals or forfeitures following the date of the filing of this proxy statement, and depending upon when the closing date occurs, certain of the equity-based awards in the table may vest in accordance with their existing terms. The following table does not capture vesting that would occur between July 17, 2017 and the closing, and it does not include phantom stock held in the Company's Supplemental Executive Retirement Plan. The following table also assumes that

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the equity-based awards that are not vested as of the closing of the merger will become fully vested pursuant to the terms of the merger agreement and applicable award agreements.

Director or Officer
  Number of
Shares of
Common
Stock
  Value of
Shares of
Common
Stock
  Number of
Company
Restricted
Stock Units
  Value of
Company
Restricted
Stock Units
  Number of
Company
Performance
Share
Awards
  Value of
Company
Performance
Share
Awards
  Aggregate
Value
 

Mark Conte

    18,627   $ 190,927     66,649   $ 683,152           $ 874,079  

Joseph Doody

    471,950 (1) $ 4,837,488     126,604   $ 1,297,691     219,671   $ 2,251,628   $ 8,386,806  

Drew G. Faust

    78,730   $ 806,983     19,488   $ 199,752           $ 1,006,735  

Curtis Feeny

    23,794   $ 243,889     40,294   $ 413,014           $ 656,902  

Paul-Henri Ferand

    30,822   $ 315,925     28,546   $ 292,597           $ 608,522  

Shira Goodman

    282,155 (2) $ 2,892,089     45,908   $ 470,557     1,077,621   $ 11,045,615   $ 14,408,261  

Jeffrey Hall

            134,859   $ 1,382,305     269,718   $ 2,764,610   $ 4,146,914  

Deborah A. Henretta

    20,115   $ 206,179     36,730   $ 376,483           $ 582,661  

Kunal S. Kamlani

    31,033   $ 318,088     28,546   $ 292,597           $ 610,685  

Christine T. Komola

    221,995 (3) $ 2,275,449     126,604   $ 1,297,691     429,861   $ 4,406,075   $ 7,979,215  

John F. Lundgren

    20,115   $ 206,179     36,730   $ 376,483           $ 582,661  

Steven Matyas

    163,086   $ 1,671,632     28,800   $ 295,200     86,104   $ 882,566   $ 2,849,398  

Neil Ringel

    14,686 (4) $ 150,532     130,774   $ 1,340,434     182,776   $ 1,873,454   $ 3,364,419  

Robert E. Sulentic

    152,990   $ 1,568,148     23,943   $ 245,416           $ 1,813,563  

Vijay Vishwanath

    113,836   $ 1,166,819     23,052   $ 236,283           $ 1,403,102  

Paul F. Walsh

    242,783   $ 2,488,526     23,052   $ 236,283           $ 2,724,809  

Michael Williams

    28,314   $ 290,219     75,143   $ 770,216     113,951   $ 1,167,998   $ 2,228,432  

(1)
Does not include unitized interests in the Company stock funds in the Company's 401(k) Plan, corresponding to 2,048 shares of common stock.

(2)
Does not include unitized interests in the Company stock funds in the Company's 401(k) Plan, corresponding to 873 shares of common stock.

(3)
Does not include unitized interests in the Company stock funds in the Company's 401(k) Plan, corresponding to 1,621 shares of common stock.

(4)
Does not include unitized interests in the Company stock funds in the Company's 401(k) Plan, corresponding to 634 shares of common stock.

Severance Arrangements; Compensatory Arrangements Relating to the Merger

        Pursuant to (i) the severance benefits agreements into which the Company has entered with each of its executive officers, (ii) the restricted stock unit agreements into which the Company has entered with each of its executive officers under the Company's 2014 stock incentive plan, which we refer to as the 2014 plan, and (iii) the performance share award agreements into which the Company has entered with each of its executive officers under the 2014 plan, certain of the Company's executive officers are entitled to specified benefits in the event of the termination of their employment under specified circumstances, including termination following a change in control of the Company.

        The Company's severance benefits agreements provide that in the event an executive officer experiences a qualified termination (as such term is defined below), such executive officer would be entitled to receive:

    continued base salary payments (at the rate in effect as of the termination date or at any higher rate in effect within the 90-day period preceding the termination date) for a specified time period (the "severance period"); and

    an amount equal to the executive officer's average annual bonus paid during the three fiscal years preceding such termination, pro-rated to cover the duration of the severance period.

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        In addition, pursuant to Company policy, such executive officer would be entitled to continue to participate in the Company's group health, dental and vision plans for the duration of the severance period and be charged only the rate applicable to current employees for such coverage.

        In the event an executive officer experiences a qualified termination within two years of a "change in control" (as defined in the severance benefits agreement), he or she would be entitled to receive the severance payments described in the preceding paragraph for a severance period that is six months longer than if the executive officer experienced a qualified termination unrelated to a change in control. Ms. Goodman also is entitled to receive, as an exit transition amount, a one-time lump sum cash payment on the date of her first payment of severance in the amount of $40,000, which amount will be increased by 5% on each anniversary of June 13, 2016 that occurs before the exit transition payment is due (but not beyond an amount equivalent to four months of salary). An executive officer's right to severance is conditioned upon timely execution and non-revocation of a release and continued compliance with restrictive covenants.

        For purposes of the severance benefits agreement, a "qualified termination" is defined as a termination of employment for any reason other than because of:

    the executive officer's death or disability;

    a termination by the Company for "cause" (as defined below); or

    a resignation or retirement by the executive officer without "good reason" (as defined below).

        Under the severance benefits agreement, "cause" means the executive officer's:

    willful failure to substantially perform duties with the Company (other than any failure resulting from incapacity due to physical or mental illness); provided, however, that the Company has given a written demand for substantial performance, which specifically identifies the areas in which performance is substandard, and the executive officer has not cured such failure within 30 days after delivery of the demand; provided, further, that no act or failure to act will be deemed "willful" unless the executive officer acted or failed to act without a good faith or reasonable belief that the conduct was in the Company's best interest;

    breach of any of the terms of a proprietary and confidential information, non-competition or other similar agreement between the executive officer and the Company;

    violation of the Company's code of ethics or attempt to secure any improper personal profit in connection with the business of the Company;

    failure to devote full working time to the affairs of the Company except as may be authorized in writing by the Company's chief executive officer or other authorized Company official;

    engaging in business other than the business of the Company except as may be authorized in writing by the Company's chief executive officer or other authorized Company official; or

    engaging in misconduct which is demonstrably and materially injurious to the Company;

provided that in each case the Company has given the executive officer written notice of its intent to terminate employment and an opportunity to present, in person, to the Executive Vice President of Human Resources or any other authorized Company official, any objections the executive officer may have to such termination.

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        Under the severance benefits agreement, "good reason" means the occurrence of any of the following conditions without the executive officer's written consent, which condition results in a material negative change to the executive officer's employment relationship with the Company:

    the executive officer's position, duties, responsibilities, power, title or office is significantly diminished (a change in the executive officer's reporting relationship, standing alone, shall not be deemed significant);

    the executive officer's annual base salary is reduced;

    the executive officer is not allowed to participate in a cash bonus program in a manner substantially consistent with past practice in light of the Company's financial performance and attainment of the executive officer's specified goals, or the executive officer's participation in any other material compensation plan (other than any stock option or stock award program, which programs are within the Compensation Committee's full discretion) is substantially reduced, both in terms of the amount of benefits provided and the level of participation relative to other participants;

    the executive officer is not provided with paid vacation or other benefits substantially similar to those enjoyed by the executive officer under any of the Company's medical, dental, life insurance, or disability plans in which the executive officer was participating, or the Company takes any action which would directly or indirectly materially reduce any of such benefits or the number of the executive officer's paid vacation days;

    in the event of a change in control, the Company or any person in control of the Company requires the executive officer to perform his or her principal duties in a new location outside a radius (measured from the executive officer's primary residence) that is extended an additional 50 miles further from the executive officer's primary residence at the time of the change in control; or

    the Company fails to obtain a satisfactory agreement from any successor to assume and agree to perform the severance benefit agreement.

        In order to terminate his or her employment for "good reason," the executive officer must provide notice to the Company within 90 days of the initial occurrence of the alleged condition; the Company must fail to cure the condition within 30 days of the executive officer's notice; and the executive officer must resign within 180 days of providing the original notice to the Company.

        In connection with the merger, the Company intends to amend its severance benefits agreements with its executive officers to provide that the Company may not terminate such agreements within two years after the closing of a change in control (including the merger) and to ensure successors and transferees of the businesses or assets of the Company are obligated under the agreements through such extended term. Otherwise, the severance benefits agreements will remain in effect in accordance with their existing terms.

        Generally, the Company's forms of equity award agreements for employees, including the Company's executive officers, provide for vesting acceleration on a "double trigger" basis, and a change in control does not itself trigger acceleration of vesting:

    the Company's restricted stock unit agreements under the 2014 plan provide that such awards will become immediately vested in full, and the shares of common stock to be received upon settlement of the award will be issued if, on or prior to the first anniversary of the consummation of a change in control the executive officer's employment is terminated for "good reason" (as defined below) by the executive officer or is terminated without "cause" (as defined below) by the Company; and

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    the Company's performance share award agreements under the 2014 plan provide that the greater of (i) the number of shares of Company common stock underlying the performance share award assuming performance is achieved at target and (ii) the number of shares determined to be issuable based on actual performance, will be issued to the performance share award holder if, within one year following the closing of a change in control, but before the board meeting at which performance under the award would otherwise be established, the executive officer's employment is terminated for "good reason" by the executive officer or is terminated without "cause" by the Company.

        Under the restricted stock unit and performance share award agreements, "cause" means the award recipient's:

    willful failure to substantially perform duties with the Company (other than any failure resulting from incapacity due to physical or mental illness); provided, however, that the Company has given a written demand for substantial performance, which specifically identifies the areas in which performance is substandard, and the recipient has not cured such failure within 30 days after delivery of the demand; provided, further, that no act or failure to act will be deemed "willful" unless the recipient acted or failed to act without a good faith or reasonable belief that the conduct was in the Company's best interest;

    breach of any of the terms of an employment, consulting, advisory, proprietary and confidential information, non-competition or other similar agreement between the recipient and the Company;

    violation of the Company's code of ethics;

    engaging in intentional deceitful act(s) that results in an improper personal benefit or injury to the Company;

    engaging in fraud or willful misconduct (not acting in good faith or with reasonable belief that conduct was in the best interests of the Company) that significantly contributes to the Company preparing a material financial restatement, other than a restatement of financial statements that became materially inaccurate because of revisions to generally accepted accounting principles;

    failure to devote full working time to the affairs of the Company except as may be authorized in writing by the Company's chief executive officer or other authorized Company official;

    engaging in business other than the business of the Company except as may be authorized in writing by the Company's chief executive officer or other authorized Company official; or

    engaging in misconduct which is demonstrably and materially injurious to the Company.

        For the purposes of the definition of "cause" contained in the restricted stock unit and performance share award agreements, any reference to the Company includes any entity that the Company directly or indirectly controls.

        Under the restricted stock unit and performance share award agreements, "good reason" means:

    a material diminution in the recipient's duties, authority, and responsibilities;

    a material reduction in the recipient's base compensation; or

    the relocation of the recipient's principal place of employment by more than an additional 50 miles further from the recipient's primary residence at the time of the change in control.

        In order to terminate his or her employment for "good reason," the recipient must provide notice to the Company within 60 days of the event triggering good reason; the Company must have 30 days

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following receipt of such notice to cure such event; and the recipient must actually terminate employment with the Company within 6 months of providing the original notice to the Company.

        Notwithstanding the terms of the restricted stock unit award agreements and the performance share award agreements, pursuant to the merger agreement, payments of merger consideration for Company restricted stock units and Company performance share awards (at target) will generally be paid promptly following the earlier of:

    the date on which the original vesting conditions applicable to such underlying restricted stock unit, including and taking into account the accelerated vesting provisions set forth in the award agreement, are satisfied; and

    the date that is 180 days following the closing (provided that the merger consideration payable in respect of Company performance share awards will not be paid later than March 15 of the calendar year following the calendar year in which the closing occurs), subject, in each case, to the holder's continued service with the Company through the applicable date.

        In October 2015, the Company adopted a policy pursuant to which the Company would not pay severance benefits under an employment or severance agreement with an executive officer to the extent that they exceed 2.99 times the sum of the executive's base salary plus target annual cash incentive award, without first seeking stockholder approval (the "Cash Severance Policy"). "Severance benefits" under the policy are limited to the following cash payments paid in connection with a termination of employment (other than due to death or permanent disability):

    payments representing continued salary, whether paid in a lump sum or over time;

    payments representing bonus amounts, based on a multiple of amounts earned or paid in prior years, whether paid in a lump sum or over time;

    payments in lieu of continued benefits (including any perquisites); and

    payments to offset the tax liability in respect of any of the foregoing.

        Further, effective March 2011, the Company adopted a policy pursuant to which it would not enter into any future compensation, severance or employment related agreement that provides for a gross up payment to cover taxes triggered by a change in control, including taxes payable under Section 4999 of the Code (the "Gross Up Policy").

        In analyzing the severance and other payments that could be made to the named executive officers in connection with the merger, the Company confirmed that the amount of any "severance benefits", as defined under the Cash Severance Policy, would not exceed the 2.99x limitation set forth in such policy. The Company also determined that the design of the Company's performance share awards, which require that the awards be settled based on target level of achievement of the performance goals if the named executive officer's employment is terminated without cause or for good reason within one year following a change in control but before performance under the award would otherwise be established, together with the Company's dependence on performance share awards as a significant component of the named executive officer's compensation, could cause the named executive officers to become subject to the parachute payment provisions of Section 280G of the Code and the related excise tax under Section 4999 of the Code (the "Parachute Provisions"). If applicable, the Parachute Provisions could result in the imposition of a 20% excise tax on a portion of both the cash (and non-cash) severance payments and the equity-based payments that may be made to the named executive officers in connection with the merger and/or a qualified termination or termination without cause or for good reason following the merger.

        In assessing the effect of the Parachute Provisions on the named executive officers, the Company engaged a national accounting firm which determined that the value of the noncompetition provisions

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to which named executive officers are subject in connection with a qualified termination (as defined under the severance benefits agreement) or a termination without cause or for good reason (as defined under the restricted stock unit and performance share unit award agreements) could offset in full the application of the Parachute Provisions to the named executive officers. As a result, to the extent that the named executive officer had, and exercised, "good reason" to terminate his or her employment following the merger, the named executive officer would likely not be subject to the Parachute Provisions. However, it is possible that if the named executive officer does not exercise his or her "good reason" resignation rights, or does not otherwise have a qualified termination (as defined under the severance benefits agreement) or termination without cause or for good reason (as defined under the restricted stock unit and performance share unit award agreements), that he or she could be subject to the adverse consequences under the Parachute Provisions.

        Because the Board believes it is important to retain the named executive officers through the closing of the merger and not to create an incentive to exercise good reason rights immediately following the merger, notwithstanding the Cash Severance Policy and the Gross Up Policy, the Company intends to enter into arrangements with up to eight individuals who may receive "excess parachute payments" (as that term is defined by Section 280G of the Code), three of whom may be Ms. Goodman, Ms. Komola and Mr. Williams (who are three of our named executive officers), to pay to each such individual an amount sufficient to "gross up" such individual (in whole or in part) for any excise taxes that may become payable by such individual pursuant to the Parachute Provisions (estimated to be not more than $13,021,401 in the aggregate for the three named executive officers and, in any event, in an aggregate amount for all eight individuals not to exceed $20,704,118). We refer to these payments as the Section 280G gross up payments. The Company continues to engage with the national accounting firm to determine whether any portion of the equity-based payments that may be made to the named executive officers in connection with the merger could be treated as reasonable compensation for services before or after the merger (which would allow such payments to be excluded from the Parachute Provision calculations) in an effort to mitigate the amount of the Section 280G gross up payments that may become payable.

        Please see the section of this proxy statement entitled "The Merger—Golden Parachute Compensation" beginning on page [—] for an estimate of the value of the amounts that would be payable to each of our named executive officers pursuant to the arrangements listed above, assuming that the closing of the merger occurred on October 31, 2017 and that each named executive officer's employment (other than the employment of Messrs. Doody, Sargent and Wilson) terminated on such date in a manner that would entitled such named executive officer to the maximum severance benefits described above.

Employee Benefits

        Pursuant to the merger agreement, from and after the effective time of the merger, Parent must cause the surviving corporation and its subsidiaries to assume, in accordance with their terms, all Company obligations under contracts, agreements, arrangements, policies, plans and commitments of the Company and its subsidiaries that are applicable to any current or former employees or directors of the Company or any subsidiary of the Company, including any employment, severance and termination plans and agreements in each case in accordance with their terms as in effect immediately before the merger agreement was signed and in the form provided to Parent prior to the date on which the merger agreement was signed.

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        For a period of one year following the effective time of the merger (or, if shorter, the period of employment of the relevant employee), Parent must provide, or must cause to be provided, to each employee of the Company or its subsidiaries:

    a total compensation package no less favorable than the total compensation package (including base salary or wage rates, commissions and target annual cash bonus opportunities but excluding the value of annual equity awards and cash payments in lieu of equity awards) provided to such employee immediately before the effective time of the merger; and

    other employee benefits (other than an employee stock purchase plan, long-term incentive or defined benefit pension or equity awards or cash payments in lieu of equity awards) that are substantially comparable, in the aggregate, to the other benefits provided to such employees immediately before the effective time of the merger.

        Notwithstanding the foregoing, employees located outside the United States or covered by collective bargaining agreements will be treated instead in accordance with applicable contracts (after taking into account the assumptions of contracts described above) and applicable law.

        For a more detailed description of these provisions of the merger agreement, please see the section of this proxy statement entitled "The Merger Agreement—Additional Agreements of the Parties to the Merger Agreement—Employee Benefits Matters" on page [—].

Indemnification of Directors and Officers

        For six years following the effective time of the merger, Parent and the Company have agreed that all rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the effective time of the merger and rights to advancement of expenses relating thereto now existing in favor of any person who is now, or has been at any time prior to the date of the merger agreement, or who becomes prior to the effective time of the merger, an officer, manager or director of the Company or any of its subsidiaries, who we refer to as an indemnified party, whether provided in the organizational documents of the Company or any of its subsidiaries or in any indemnification agreement between any indemnified party and the Company or any of its subsidiaries, will survive the merger and continue in full force and effect, and may not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any indemnified party.

        For six years following the effective time of the merger, Parent and the surviving corporation have agreed to maintain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of present and former directors and officers of the Company and its subsidiaries in respect of acts or omissions occurring or alleged to have occurred at or prior to the effective time of the merger as contained in the certificate of incorporation and by-laws of the Company in effect on the date of the merger agreement.

        Parent has also agreed to either:

    maintain in effect for six years from the effective time of the merger the Company's existing directors' and officers' liability insurance policy with respect to matters existing or occurring at or prior to the effective time of the merger (including the transactions contemplated by the merger agreement), so long as the annual premiums would not exceed more than 300% of the current annual premium paid for the Company's directors' and officers' liability insurance policy, which we refer to as the Maximum Premium; or

    purchase a "tail" policy for an annual cost not to exceed the Maximum Premium and maintain such "tail" policy in full force and effect for six years from the effective time of the merger.

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        Notwithstanding the foregoing, the Company may, prior to the effective time of the merger, elect to purchase its own "tail" policy using a nationally recognized broker selected by Parent in consultation with the Company, as long as such "tail" policy does not cost more than the Maximum Premium.

        For a more detailed description of these provisions of the merger agreement, please see the section of this proxy statement entitled "The Merger Agreement—Additional Agreements of the Parties to the Merger Agreement—Indemnification" on page [—].

Intent to Vote in Favor of the Merger

        As of the record date, the directors and executive officers of the Company beneficially owned and were entitled to vote, in the aggregate, [—] shares of Company common stock, representing [—]% of the outstanding shares of Company common stock on the record date. The directors and executive officers have informed the Company that they currently intend to vote all of their shares of Company common stock "FOR" the proposal to adopt the merger agreement, "FOR" approval of the nonbinding advisory proposal regarding "golden parachute" compensation and "FOR" the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

Golden Parachute Compensation

        The Company has adopted the Cash Severance Policy and the Gross Up Policy, each described above in the section entitled "Interests of Certain Persons in the Merger—Severance Arrangements; Compensatory Arrangements Relating to the Merger".

        In analyzing the severance and other payments that could be made to the named executive officers in connection with the merger, the Company confirmed that the amount of any "severance benefits", as defined under the Cash Severance Policy, would not exceed the 2.99x limitation set forth in such policy. The Company also determined that the design of the Company's performance share awards, which require that the awards be settled based on target level of achievement of the performance goals if the named executive officer's employment is terminated without cause or for good reason within one year following a change in control but before performance under the award would otherwise be established, together with the Company's dependence on performance share awards as a significant component of the named executive officer's compensation, could cause the named executive officers to become subject to the Parachute Provisions. If applicable, the Parachute Provisions could result in the imposition of a 20% excise tax on a portion of both the cash (and non-cash) severance payments and the equity-based payments that may be made to the named executive officers in connection with the merger and/or a qualified termination or termination without cause or for good reason following the merger.

        In assessing the effect of the Parachute Provisions on the named executive officers, the Company engaged a national accounting firm which determined that the value of the noncompetition provisions to which named executive officers are subject in connection with a qualified termination (as defined in the severance benefits agreement) or a termination without cause or for good reason (as defined under the restricted stock unit and performance share unit award agreements) could offset in full the application of the Parachute Provisions to the named executive officers. As a result, to the extent that the named executive officer had, and exercised, "good reason" to terminate his or her employment following the merger, the named executive officer would likely not be subject to the Parachute Provisions. However, it is possible that if the named executive officer does not exercise his or her "good reason" rights, or does not otherwise have a qualified termination (as defined under the severance benefits agreement) or termination without cause or for good reason (as defined under the

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restricted stock unit and performance share unit award agreements), that he or she could be subject to the adverse consequences under the Parachute Provisions.

        Because the Board believes it is important to retain the named executive officers through the closing of the merger and not to create an incentive to exercise good reason resignation rights immediately following the merger, notwithstanding the Cash Severance Policy and the Gross Up Policy, the Company intends to enter into arrangements with up to eight individuals who may receive "excess parachute payments" (as that term is defined by Section 280G of the Code), three of whom may be Ms. Goodman, Ms. Komola and Mr. Williams (who are three of our named executive officers), to pay to each such individual an amount sufficient to "gross up" such individual (in whole or in part) for any excise taxes that may become payable by such individual pursuant to the Parachute Provisions (estimated to be not more than $13,021,401 in the aggregate for the three named executive officers and, in any event, in an aggregate amount for all eight individuals not to exceed $20,704,118). We refer to these payments as the Section 280G gross up payments. The Company continues to engage with the national accounting firm to determine whether any portion of the equity-based payments that may be made to the named executive officers in connection with the merger could be treated as reasonable compensation for services before or after the merger (which would allow such payments to be excluded from the Parachute Provision calculations) in an effort to mitigate the amount of the Section 280G gross up payments that may become payable.

        The following table sets forth the information required by Item 402(t) of Regulation S-K regarding the compensation for our named executive officers that is based on or otherwise relates to the merger, assuming that the merger was consummated on October 31, 2017, and that each named executive officer's employment (other than the employment of Messrs. Sargent and Wilson, whose employment has already terminated, and the employment of Mr. Doody, who will retire before the consummation of the merger) was terminated on the same day, such that he or she experienced a qualified termination within two years of a change in control under his or her severance benefits agreement.

        The table below describes the estimated potential payments to each of our named executive officers under the terms of their respective severance benefits agreements as they may have been amended from time to time, including, in the case of Ms. Goodman, by that certain letter agreement between the Company and Ms. Goodman dated June 13, 2016, together with the value of the unvested Company restricted stock units and Company performance shares that would be accelerated in accordance with the terms of the merger agreement. The amounts shown in the table do not include the value of payments or benefits that would have been earned, or any amounts associated with equity awards that would vest pursuant to their terms, on or prior to the effective date of the merger or the value of payments or benefits that are not based on or otherwise related to the merger.

        For purposes of calculating the potential payments set forth in the table below, we have assumed that (a) the merger shall become effective on, and the date of termination of employment of the named executive officer (other than for Messrs. Doody, Sargent and Wilson) is, October 31, 2017; (b) the stock price is $10.25 per share, which is the per share merger consideration; and (c) no withholding taxes are applicable to any payments set forth in the table. The amounts shown in the table are estimates only and are based on assumptions and information available to date. The actual amounts

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that may be paid upon an individual's termination of employment can only be determined at the actual time of such termination.

Name
  Cash($)(1)   Equity($)(2)   Perquisites/
Benefits($)(3)
  Tax
Reimbursement
($)(4)
  Total($)  

Shira Goodman

    3,823,453     11,516,172     23,346     0 to 8,600,333     15,362,971 to 23,963,304  

Christine T. Komola

    1,604,424     5,703,766         0 to 3,318,651     7,308,190 to 10,626,841  

Mark Conte

    477,555     664,733     15,564         1,157,852  

Joseph G. Doody

        2,251,628             2,251,628  

Michael Williams

    1,084,113     1,938,214     23,346     0 to 1,102,417     3,045,673 to 4,148,090  

Ronald Sargent

        5,155,863             5,155,863  

John Wilson

        1,134,942             1,134,942  

(1)
The amount listed in this column represents cash severance payments which are "double-trigger" and payable upon a qualified termination that occurs within two years of the consummation of change in control. For this purpose, a "qualified termination" is defined as a termination of employment for any reason other than because of (a) the executive officer's death or disability, (b) a termination by the Company for cause, or (c) a resignation or retirement by the executive without good reason, as such terms are defined in the severance benefits agreement. Cash severance payments are paid in equal weekly installments over the course of the named executive officer's severance period. The severance period is 30 months for Ms. Goodman, 12 months for Mr. Conte and 18 months for each of Ms. Komola and Mr. Williams. Each weekly payment is equal to the sum of (i) the named executive officer's annualized base salary rate in effect immediately prior to the qualified termination (or any higher rate in effect within the 90 days prior to notice of termination under the agreement) divided by 52 weeks plus (ii) one-fifty-second of the average annual bonus paid to the named executive officer by Staples during the three full fiscal years preceding the qualified termination. Ms. Goodman also is entitled to receive, as an exit transition amount, a one-time lump sum cash payment on the date of her first payment of severance in the amount of $40,000, which amount will be increased by 5% on each anniversary of June 13, 2016 that occurs before the exit transition payment is due (but not beyond an amount equivalent to four months of salary); accordingly, the amount of Ms. Goodman's transition payment would equal $42,000, assuming a qualified termination on October 31, 2017.

The annualized base salary rate and average annual bonus over the last three fiscal years for each named executive officer entitled to severance under a severance benefits agreement effective as of the closing date of the merger is:

Name
  Base Salary($)   Three-Year Average
Annual Incentive
Compensation($)
 

Shira Goodman

    1,100,000     412,581  

Christine T. Komola

    770,000     299,616  

Mark Conte

    386,334     91,221  

Michael Williams

    575,784     146,958  

Named executive officers are not entitled to any severance benefits under their severance benefits agreements if the Company determines, within 60 days following the named executive officer's termination, that his or her conduct prior to termination would have warranted a discharge for cause (as defined in the severance benefits agreement), or if, during the severance period, the named executive officer violates the terms of any non-competition or confidentiality provision contained in any employment, consulting, advisory, non-disclosure, non-competition or other similar agreement between the named executive officer and the Company.

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Messrs. Doody, Sargent and Wilson are not party to agreements with the Company pursuant to which they would be entitled to severance payments from the Company in connection with the merger.

(2)
The amount listed in this column represents, in accordance with the terms of the merger agreement, the payments in cancellation of (i) Company restricted stock units held by each named executive officer, calculated as the product of (A) the merger consideration of $10.25 per share of Company common stock multiplied by (B) the number of Company restricted stock units being canceled and (ii) Company performance share awards held by each named executive officer, calculated as the product of (A) the merger consideration of $10.25 per share of Company common stock multiplied by (B) the number of shares underlying the Company performance share award being cancelled, with performance deemed achieved at target. Amounts payable to Messrs. Doody, Sargent and Wilson will be paid promptly after the closing of the merger and are single-trigger in nature. Amounts payable to Ms. Goodman, Ms. Komola and Messrs. Conte and Williams will be paid promptly following the earlier of (A) the date on which the original vesting conditions applicable to such underlying restricted stock unit or performance share award, including and taking into account any accelerated vesting provisions set forth therein, are satisfied and (B) the date that is 180 days following the closing (provided that no payments in respect of Company performance share awards will be made later than March 15 of the year following the year in which the merger is consummated), in each case, subject to the holder's continued service with the Company through the applicable date.


These payments in respect of equity awards held by Ms. Goodman, Ms. Komola, and Messrs. Conte and Williams are "double-trigger" benefits to the extent they are paid in accordance with the accelerated vesting provisions set forth in the applicable award agreements (which generally provide for vesting in full in the event of the holder's termination of employment by the Company without "cause" or by the holder for "good reason" within one year following a change in control, as those terms are defined in the applicable award agreement). However, the payments would be "single-trigger" benefits to the extent they are paid out promptly following the closing or the date that is 180 days following the closing (or, in the case of Company performance share awards, by March 15 of the year following the year in which the merger is consummated).


The number of Company restricted stock units and Company performance share awards held by each named executive officer to be treated as described in this column are as follows:
Name
  Company
Restricted Stock
Units
  Company
Performance Share
Awards (at Target)
 

Shira Goodman

    45,908     1,077,621  

Christine T. Komola

    126,604     429,861  

Mark Conte

    64,852      

Joseph G. Doody

        219,671  

Michael Williams

    75,143     113,951  

Ronald Sargent

        503,011  

John Wilson

        110,726  
(3)
The amount listed in this column represents the Company's cost to forgo charging the executive officers any amount in excess of the employee-side premiums under COBRA for group health, dental and vision coverage for a period of time following the executive officer's termination of employment, as follows: 18 months for Ms. Goodman and Mr. Williams and 12 months for Mr. Conte. Ms. Komola would also be entitled to 18 months were she to become covered by the Company's group health, dental and vision coverage. The foregoing subsidy is "double-trigger" in nature and payable only upon a qualified termination.

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(4)
The range listed in this column represents the estimated minimum and maximum amount of the Section 280G gross up payment the named executive officer may be entitled to receive in accordance with gross-up arrangements expected to be put in place by the Company prior to the effective time of the merger, assuming that the closing of the merger occurs on October 31, 2017, that the named executive officer's employment terminates on that date, and that current interest and tax rates apply. The actual amounts of the Section 280G gross up payments depends on whether, and to what extent, excise taxes pursuant to the Parachute Provisions become due, which will depend on a number of factors including the actual effective date of the merger, whether a named executive officer is terminated and the date of such termination, whether a named executive officer agrees with Parent in writing that his or her equity compensation will be treated in a manner other than as described in the merger agreement, interest rates and tax rates. In addition, the actual amounts of the Section 280G gross up payments may be reduced based on the value of any noncompetition agreement and/or certain amounts that may be valued as reasonable compensation for services performed by the named executive officer either before or after the effective time of the merger. The Company has not yet entered into the gross-up arrangements with any of the named executive officers and the actual Section 280G gross up payments may increase if the assumptions underlying the calculation of the range in the table above are different from the actual circumstances. Accordingly, the maximum value of the Section 280G gross up payment payable under the definitive arrangement may be higher than the range set forth in the table. However, the Board has stipulated that the aggregate amount of the Section 280G gross up payments to the eight individuals eligible to receive such payments (including Ms. Goodman, Ms. Komola and Mr. Williams) shall not exceed $20,704,118. These payments, which shall be made in one or more lump sum payments, are (i) "single-trigger" in nature, insofar as they relate to excise taxes imposed under Section 4999 of the Code on the equity acceleration provided for under the merger agreement and merger consideration paid to the named executive officer in respect of Company performance share awards, and (ii) "double-trigger" in nature, insofar as they relate to the excise taxes imposed under Section 4999 of the Code on severance payments and continuation of benefits which would be paid following an executive officer's qualified termination within two years of the change in control.

Accounting Treatment

        The merger will be accounted for as a "purchase transaction" for financial accounting purposes.

U.S. Federal Income Tax Consequences of the Merger

        The following is a summary of the U.S. federal income tax consequences of the merger to "U.S. holders" and certain "non-U.S. holders" (both terms defined below) whose shares of our common stock are converted into the right to receive cash pursuant to the merger. This summary is for information purposes only and is not tax advice. It does not purport to consider all aspects of U.S. federal income taxation that might be relevant for holders of our common stock. This summary is based on the Code the applicable U.S. Treasury regulations promulgated under the Code, published rulings by the Internal Revenue Service, which we refer to as the IRS, and judicial authorities and administrative decisions, all as in effect as of the date of this proxy statement and all of which are subject to change or differing interpretations, possibly with retroactive effect. Any such change could alter the tax consequences to the holders described herein. This summary is not binding on the IRS or a court, and there can be no assurance that the tax consequences described in this summary will not be challenged by the IRS or that they would be sustained by a court if so challenged. No ruling has been or will be sought from the IRS, and no opinion of counsel has been or will be rendered, as to the U.S. federal income tax consequences of the merger.

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        For purposes of this summary, the term "U.S. holder" means a beneficial owner of shares of our common stock that is, for U.S. federal income tax purposes:

    an individual who is a citizen or resident of the United States;

    a corporation (including any entity treated as a corporation) created or organized under the laws of the United States, any state thereof or the District of Columbia;

    a trust that (a) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons or (b) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person; or

    an estate the income of which is subject to U.S. federal income tax regardless of its source.

        As used herein, a "non-U.S. holder" means a beneficial owner of shares of our common stock that is neither a U.S. holder nor an entity or arrangement treated as a partnership for U.S. federal income tax purposes.

        If a partnership (including an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our common stock, the tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. A partner of a partnership holding our common stock should consult the partner's tax advisor regarding the U.S. federal income tax consequences of the merger to such partner.

        This summary applies only to holders who hold shares of our common stock as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment), and does not address or consider all of the U.S. federal income tax consequences that may be applicable to holders of our common stock in light of their particular circumstances. For instance, this summary does not address the alternative minimum tax or the tax consequences to stockholders who validly exercise dissenters' rights under the DGCL. In addition, this summary does not address the U.S. federal income tax consequences of the merger to holders who are subject to special treatment under U.S. federal income tax rules, including, for example, banks and other financial institutions; insurance companies; securities dealers or broker-dealers; mutual funds; traders in securities who elect to use the mark-to-market method of accounting; tax-exempt investors; S corporations; holders classified as partnerships or other flow-through entities under the Code; U.S. expatriates; holders who hold their shares of our common stock as part of a hedge, straddle, conversion transaction, or other integrated investment or constructive sale transaction; holders whose functional currency is not the U.S. dollar; holders who acquired their shares of our common stock through the exercise of Company stock options or otherwise as compensation; and, except to the extent described below, holders who actually or constructively own 5% or more of the outstanding shares of our common stock. In addition, this summary does not address the impact of the Medicare contribution tax, any aspects of foreign, state, local, estate, gift, or other tax laws (or any U.S. federal tax laws other than those pertaining to income tax) that may be applicable to a particular holder in connection with the merger.

        Further, this summary does not address any tax consequences of the merger to holders of restricted stock units or performance shares whose restricted stock units or performance shares are cancelled in exchange for cash pursuant to the merger. Such restricted stock unit or performance share holders should consult their tax advisors regarding the tax consequences of the merger to them. Moreover, this summary does not discuss any other matters relating to equity compensation or benefit plans (including our 401(k) plan).

U.S. Holders

        A U.S. holder's receipt of the per share merger consideration in exchange for shares of our common stock will generally be a taxable transaction for U.S. federal income tax purposes. In general,

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a U.S. holder whose shares of common stock are converted into the right to receive cash pursuant to the merger will recognize capital gain or loss for U.S. federal income tax purposes in an amount equal to the difference, if any, between the amount of cash received (determined before deduction of any applicable withholding taxes) with respect to such shares and the U.S. holder's adjusted tax basis in such shares. A U.S. holder's adjusted tax basis will generally equal the price the U.S. holder paid for such shares. The amount of gain or loss must be determined separately for each block of shares (i.e., shares acquired at the same cost in a single transaction) surrendered by the U.S. holder in the merger. Such gain or loss will generally be long-term capital gain or loss if the U.S. holder's holding period for such shares is more than 12 months at the effective time of the merger. Long-term capital gains recognized by individual and certain other non-corporate U.S. holders are generally taxed at preferential U.S. federal income tax rates. A U.S. holder's ability to deduct capital losses may be limited.

Non-U.S. Holders

        Cash received in the merger by a non-U.S. holder generally will not be subject to U.S. withholding tax (other than potentially to backup withholding tax, as discussed below) and will not be subject to U.S. federal income tax unless:

    the gain is effectively connected with a trade or business of the non-U.S. holder in the United States (and, if an income tax treaty applies, is attributable to a United States permanent establishment or fixed base maintained by such non-U.S. holder), in which case the non-U.S. holder generally will be subject to tax on such gain in the same manner as if it were a U.S. holder, and, if the non-U.S. holder is a foreign corporation, such gain may also be subject to an additional branch profits tax at a rate of 30% or at such lower rate as may be specified by an applicable income tax treaty;

    the non-U.S. holder is an individual who was present in the United States for 183 days or more in the taxable year of the merger and certain other conditions are met, in which case the non-U.S. holder generally will be subject to a 30% tax (or such lower rate as may be specified by an applicable income tax treaty between the United States and such holder's country of residence) on the net gain derived from the disposition, which may be offset by certain U.S.-source capital losses of the non-U.S. holder recognized in the taxable year of the disposition, if any; or

    the Company was a "United States real property holding corporation," which we refer to as a USRPHC, within the meaning of Section 897(c)(2) of the Code for U.S. federal income tax purposes within the five years preceding the merger and the non-U.S. holder owned, actually or constructively, more than 5% of the Company common stock at any time during the five-year period preceding the merger. Generally, a corporation is a USRPHC if the fair market value of its "U.S. real property interests" equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests plus its other assets used or held for use in a trade or business. Although there can be no assurances in this regard, the Company does not believe it is, or has been during the five years preceding the merger, a USRPHC for U.S. federal income tax purposes.

        Non-U.S. holders should consult their own tax advisors regarding the tax consequences to them of the merger.

Backup Withholding and Information Reporting

        A U.S. holder may be subject to backup withholding on all payments to which such U.S. holder is entitled in connection with the merger, unless the U.S. holder provides its correct taxpayer identification number and complies with applicable certification procedures or otherwise establishes an

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exemption from backup withholding. In addition, if the paying agent is not provided with a U.S. holder's correct taxpayer identification number or other adequate basis for exemption, the U.S. holder may be subject to certain penalties imposed by the IRS. Each U.S. holder should complete and sign the IRS Form W-9 included as part of the letter of transmittal and timely return it to the paying agent in order to avoid backup withholding, unless an exemption applies and is established in a manner satisfactory to the paying agent.

        Certain non-U.S. holders may also be subject to backup withholding unless they establish an exemption from backup withholding in a manner satisfactory to the paying agent (such as by completing and signing an appropriate IRS Form W-8) and otherwise comply with the backup withholding rules. Non-U.S. holders should consult their own tax advisors regarding these matters.

        Backup withholding is not an additional tax. Rather, any amounts withheld under the backup withholding rules will generally be allowable as a refund or credit against a holder's U.S. federal income tax liability, provided that certain required information is timely furnished to the IRS.

        Payments made pursuant to the merger will also be subject to information reporting unless an exemption applies.

        This summary is provided for general information only and is not tax advice. The U.S. federal income tax consequences described above are not intended to constitute a complete description of all tax consequences relating to the merger. Because individual circumstances may differ, each stockholder should consult the stockholder's tax advisor regarding the applicability of the rules discussed above to the stockholder and the particular tax effects to the stockholder of the merger in light of such stockholder's particular circumstances and the application of state, local, foreign, estate, gift and other tax laws (or any U.S. federal tax laws other than those pertaining to income tax).

Regulatory Approvals

        The merger is subject to the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The merger agreement also provides that the merger may be subject to the expiration or termination of applicable waiting periods under other applicable antitrust laws identified by the parties. The parties initially identified the Canadian Competition Act under this provision; however, following further analysis after the announcement of the transaction, the parties have agreed that no filling or clearance under such act is required and that such act is not applicable within the meaning of the merger agreement. Under the terms of the merger agreement, the merger cannot be consummated if any governmental entity of competent jurisdiction has enacted, issued, promulgated, enforced or entered any order, executive order, stay, decree, judgment or injunction (temporary, preliminary or permanent) or statute, rule or regulation which has the effect of making the merger illegal or otherwise prohibiting, restraining, preventing or enjoining consummation of the merger.

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THE MERGER AGREEMENT (PROPOSAL ONE)

        The following is a summary of the material terms and conditions of the merger agreement. The description in this section and elsewhere in this proxy statement is qualified in its entirety by reference to the complete text of the merger agreement, a copy of which is attached as Annex A and is incorporated by reference into this proxy statement. This summary does not purport to be complete and may not contain all of the information about the merger agreement that is important to you. We encourage you to read the merger agreement carefully and in its entirety because it is the legal document that governs the merger.

Explanatory Note Regarding the Merger Agreement

        The merger agreement is included to provide you with information regarding its terms. Factual disclosures about the Company contained in this proxy statement or in the Company's public reports filed with the SEC may supplement, update or modify the factual disclosures about the Company contained in the merger agreement. The representations, warranties and covenants made in the merger agreement by the Company, Parent and Merger Sub were qualified and subject to important limitations agreed to by the Company, Parent and Merger Sub in connection with negotiating the terms of the merger agreement. In particular, in your review of the representations and warranties contained in the merger agreement and described in this summary, it is important to bear in mind that the representations and warranties were negotiated with the principal purposes of establishing the circumstances in which a party to the merger agreement may have the right not to consummate the merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocating risk between the parties to the merger agreement, rather than establishing as facts the matters described therein. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to stockholders and reports and documents filed with the SEC and in some cases were qualified by the matters contained in a disclosure schedule that the Company delivered to Parent in connection with the merger agreement, which we refer to as the Company Disclosure Schedule and which disclosures are not reflected in the merger agreement. Moreover, information concerning the subject matter of the representations and warranties, which do not purport to be accurate as of the date of this proxy statement, may have changed since the date of the merger agreement, and such subsequent developments or new information may not be included in this proxy statement.

The Merger

        Upon the terms and subject to the conditions of the merger agreement, Merger Sub, a wholly-owned subsidiary of Parent, will merge with and into the Company, with the Company continuing as the surviving corporation of the merger. As a result of the merger, the separate corporate existence of Merger Sub will cease, and the Company will become a wholly-owned subsidiary of Parent. We sometimes refer to the Company after the consummation of the merger as the surviving corporation. The certificate of incorporation of the Company will be amended and restated in its entirety by virtue of the merger, to read as set forth on an exhibit to the merger agreement. The by-laws of the Company will also be amended and restated in their entirety so that, immediately following the effective time of the merger, they are identical to the by-laws of Merger Sub as in effect immediately prior to the effective time of the merger, except that all references to the name of Merger Sub will be changed to refer to the Company. The directors of Merger Sub immediately prior to the effective time of the merger will be the initial directors of the surviving corporation. The officers of the Company immediately prior to the effective time of the merger will be the initial officers of the surviving corporation.

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Closing and Effective Time of the Merger

        The closing of the merger will occur as soon as practicable (but in any event no later than the third business day) following the satisfaction or waiver of all of the closing conditions set forth in the merger agreement or at such other date as the parties may agree in writing; provided that, if the marketing period (described below) has not ended at such time, then, subject to the continued satisfaction or waiver of such closing conditions at such time, the closing shall occur instead on the earliest of (i) any business day during the marketing period as may be specified by Parent on no less than three business days' prior written notice to the Company, (ii) the third business day following the final day of the marketing period or (iii) such other date, time or place as agreed to in writing by Parent and the Company. The merger will become effective upon the filing of a certificate of merger with the Delaware Secretary of State or at such subsequent time or date as Parent and the Company may agree and specify in the certificate of merger. We intend to complete the merger as promptly as practicable, subject to receipt of the Company stockholder approval and satisfaction of the other closing conditions. Although we currently expect to complete the merger no later than December 2017, we cannot specify when or assure you that all conditions to the merger will be satisfied or waived.

Marketing Period

        The "marketing period" refers to the first period of 18 consecutive business days throughout which both:

    Parent will have certain financial information and other customary business and financial data that is requested by Parent to market, syndicate and consummate the debt financing, which information we refer to as required financial information, and such required financial information will be compliant (as described below); and

    the closing conditions of Parent, Merger Sub and the Company will have been satisfied or waived (other than those conditions that by their nature can only be satisfied at the closing) and nothing shall have occurred and no condition shall exist that would cause any of the other closing conditions applicable to Parent and Merger Sub to fail to be satisfied, assuming that the date of the closing were to be scheduled for any time during such 18 consecutive business day period.

        With respect to the required financial information, the term "compliant" means such required financial information that:

    taken as a whole, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make such required financial information not misleading;

    is compliant in all material respects with all applicable requirements of Regulations S-K and S-X under the Securities Act applicable to offerings of debt securities on a registration statement on Form S-1 (other than such provisions for which compliance is not customary in a Rule 144A offering of high yield debt securities);

    the Company's auditors have not objected to the use of their audit opinions related to any audited financial statements included in such required financial information and any interim quarterly financial statements included in such required financial information have been reviewed by the Company's independent auditors; and

    the Company's auditors are prepared to issue an agreed upon form of comfort letter with respect to the required financial information when customarily required to be delivered during the marketing period.

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        The marketing period will not be deemed to commence if, prior to the completion of the marketing period:

    our auditors have withdrawn their audit opinion contained in the required financial information;

    the Company issues a public statement indicating its intent to restate any historical financial statements of the Company or that any such restatement is under consideration or may be a possibility, in which case the marketing period will not be deemed to commence unless and until such restatement has been completed and the relevant financial statements have been amended or the Company has announced that it has concluded that no restatement shall be required in accordance with GAAP;

    the Company has been delinquent in filing any Annual Report on Form 10-K or Quarterly Report on Form 10-Q, in which case the marketing period will not be deemed to commence unless and until all such delinquencies have been cured; or

    the required financial information ceases to be compliant (as described above) or would be required to be updated in order to be compliant on any day during such 18 consecutive business day period, in which case the marketing period will not be deemed to commence until the receipt by Parent of such compliant updated required financial information.

        The marketing period will end on any earlier date on which all of the debt financing or any alternative financing pursuant to the terms of the merger agreement is obtained.

        If we reasonably believe we have delivered the applicable required financial information, we may deliver to Parent a written notice to that effect (stating when we believe we completed such delivery), in which case the marketing period will be deemed to have commenced on the date specified in that notice unless Parent reasonably believes we have not completed delivery of the required financial information and, within two business days after the delivery of such notice by us, delivers written notice to us to that effect (stating with reasonable specificity which required financial information Parent reasonably believes we have not delivered).

Merger Consideration

        At the effective time of the merger, each issued and outstanding share of Company common stock, other than the dissenting shares and the cancelled shares, will be canceled and automatically converted into the right to receive $10.25 in cash, without interest and subject to deduction for any required withholding tax, which we refer to as the merger consideration or the per share merger consideration.

        The merger consideration will be adjusted to reflect fully the effect of any reclassification, stock split, reverse split, stock dividend (including any dividend or distribution of securities convertible into Company common stock), reorganization, recapitalization or other like change with respect to Company common stock occurring (or for which a record date is established) after the date of the merger agreement and prior to the effective time.

        Any shares of Company common stock that are held in the treasury of the Company and any shares of Company common stock owned any subsidiary of the Company, Parent, Merger Sub or any other affiliate of Parent will be canceled and no consideration will be paid for such shares.

        Any dissenting shares will be entitled to the rights granted by Section 262 of the DGCL. These rights are discussed more fully under the section of this proxy statement entitled "Appraisal Rights" beginning on page [—].

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Payment Procedures

        At or prior to the effective time of the merger, Parent will enter into an agreement (in form and substance reasonably acceptable to the Company) with a paying agent for the merger, which we refer to as the paying agent, for the paying agent to act in such capacity for the merger and cause to be deposited with the paying agent, for the benefit of the holders of shares of Company common stock outstanding immediately prior to the effective time of the merger, cash in an amount sufficient to pay the aggregate merger consideration, which we refer to as the aggregate merger consideration, pursuant to the merger agreement, which we refer to as the payment fund. The payment fund may not be used for any purpose other than to fund payments to stockholders pursuant to the merger agreement. The payment fund will be invested by the paying agent as directed by Parent, except that these investments must be in obligations of or guaranteed by the United States, in commercial paper obligations rated A-1 or P-1 or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation, respectively, or in certificates of deposit, bank repurchase agreements or banker's acceptances of commercial banks with capital exceeding $10 billion (based on the most recent financial statements of such bank which are then publicly available). No gain or loss on the payment fund will affect the amounts payable under the merger agreement and Parent must take all actions necessary to ensure that the payment fund includes at all times cash sufficient to satisfy Parent's obligation to pay the aggregate merger consideration under the merger agreement. Any interest and other income resulting from these investments (net of any losses) will be paid to Parent upon termination of the payment fund in accordance with the merger agreement. In the event the payment fund is diminished below the level required for the paying agent to make prompt cash payments as required under the merger agreement, Parent must, or must cause the surviving corporation to, immediately deposit additional cash into the payment fund equal to the deficiency in the amount required to make such payments.

        Within five business days after the effective time, Parent will cause the paying agent to mail to each holder of record of a certificate representing shares of Company common stock, which we refer to as a certificate, a letter of transmittal and instructions for use in effecting the surrender of the certificates in exchange for the merger consideration payable with respect thereto. Upon surrender of a certificate to the paying agent in accordance with the terms of such letter of transmittal, duly executed, the holder of such certificate will be promptly paid in exchange therefor a cash amount in immediately available funds equal to the number of shares of Company common stock formerly represented by such certificate multiplied by the merger consideration, and the certificate so surrendered shall forthwith be cancelled.

        Any holder of uncertificated shares that immediately prior to the effective time represented shares of Company common stock, which we refer to as uncertificated shares, will not be required to deliver a certificate or an executed letter of transmittal to the paying agent to receive the merger consideration that such holder is entitled to receive pursuant to the merger agreement. In lieu thereof, each holder of record of one or more uncertificated shares will, upon receipt by the paying agent of an "agent's message" in customary form with respect to any uncertificated share (or such other evidence, if any, of transfer as the paying agent may reasonably request), be promptly paid the merger consideration in respect of such uncertificated share, and such uncertificated share shall forthwith be cancelled.

        No interest will be paid or accrued on the cash payable upon the surrender of certificates or uncertificated chares. In the event of a transfer of ownership of a certificate or uncertificated shares which is not registered in the transfer records of the Company, the merger consideration with respect thereto may be paid to a person other than the person in whose name the certificate or uncertificated shares is registered, if, in the case of a certificate, such certificate is presented to the paying agent, and in each case the transferor provides to paying agent (i) all documents required to evidence and effect such transfer and (ii) evidence that any applicable stock transfer taxes have been paid. Until surrendered as contemplated by the merger agreement, each certificate and all uncertificated shares (other than certificates or uncertificated shares representing dissenting shares) will be deemed at any

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time after the effective time to represent only the right to receive upon such surrender the merger consideration as contemplated by the merger agreement.

        All merger consideration paid upon the surrender of certificates and cancellation of uncertificated shares in accordance with the terms of the merger agreement will be deemed to have been paid in satisfaction of all rights pertaining to the shares of Company common stock formerly represented by such certificates and uncertificated shares, and from and after the effective time there will be no further registration of transfers on the stock transfer books of the surviving corporation of the shares of Company common stock which were outstanding immediately prior to the effective time. If, after the effective time, certificates or uncertificated shares are presented to the surviving corporation or the paying agent for any reason, they will be cancelled and exchanged as provided in the merger agreement.

        Any portion of the payment fund that remains undistributed to the holders of certificates and uncertificated shares for one year after the effective time (including all interest and other income received by the paying agent in respect of all funds made available to it) will be delivered to Parent, upon demand, and any holder of a certificate or uncertificated shares who has not previously complied with the merger agreement will be entitled to receive only from Parent or the surviving corporation (subject to abandoned property, escheat and other similar laws) payment of its claim for merger consideration, without interest.

        To the extent permitted by applicable law, none of Parent, Merger Sub, the Company, the surviving corporation or the paying agent will be liable to any holder of shares of Company common stock for any amount required to be delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. If any certificates or uncertificated shares shall not have been surrendered prior to the date on which the related merger consideration would escheat to or become the property of any governmental entity, any such merger consideration will, to the extent permitted by applicable law, immediately prior to such time become the property of Parent, free and clear of all claims or interest of any person previously entitled thereto.

        If any certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed, and, if reasonably required by Parent, the posting by such person of a bond in such reasonable and customary amount as Parent may direct as indemnity against any claim that may be made against it with respect to such certificate, the paying agent will pay, in exchange for such lost, stolen or destroyed certificate, the merger consideration to be paid in respect of the shares of Company common stock formerly represented thereby pursuant to the merger agreement.

        You should not send your certificates (if any) to the paying agent until you have received transmittal materials from the paying agent. Do not return your certificates (if any) with the enclosed proxy.

Appraisal Rights

        Shares of Company common stock issued and outstanding immediately prior to the effective time of the merger that are held by a holder who has made a proper demand for appraisal of such shares of Company common stock in accordance with Section 262 of the DGCL, continuously holds such shares of record from the date of the making of the demand through the effective time of the merger and has not thereafter failed to perfect, withdraw or otherwise lose his, her or its rights to appraisal, which we refer to as dissenting shares, will not be converted into or represent the right to receive the merger consideration in accordance with the merger agreement. Holders of dissenting shares will be entitled to have their shares appraised by the Delaware Court of Chancery and to receive in lieu of the merger consideration payment in cash of the amount determined by the Delaware Court of Chancery to be the "fair value" of the shares of Company common stock as of the effective time of the merger. These

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rights are discussed more fully under the section of this proxy statement entitled "Appraisal Rights" beginning on page [—].

        If any dissenting shares lose their status as such (through failure to perfect or otherwise), then, as of the later of the effective time or the date of loss of such status, such shares will be deemed to have been converted as of the effective time into the right to receive the merger consideration in accordance with the merger agreement, without interest and subject to deduction for any required withholding tax, and will not thereafter be deemed to be dissenting shares.

        The Company must give Parent: (i) prompt notice of any written demand for appraisal received by the Company prior to the effective time pursuant to the DGCL, any withdrawal of any such demand and any other demand, notice, withdrawal or instrument delivered to the Company prior to the effective time pursuant to the DGCL that relates to such demand; and (ii) the right to participate in, direct and control all negotiations and proceedings with respect to any such demand, notice, withdrawal or instrument. The Company may not settle or pay or make any payment or settlement offer prior to the effective time with respect to any such demand, notice or instrument or agree to do any of the foregoing unless Parent has given its written consent to such settlement, payment or payment or settlement offer.

Treatment of Company Stock Awards and Employee Stock Purchase Plan

        Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, each then-outstanding and unexercised option to purchase shares of Company common stock with an exercise price per share equal to or greater than the per share merger consideration will be canceled, without any consideration being payable in respect thereof, and will have no further force or effect. Because the current exercise price per share of each outstanding Company stock option is equal to or greater than the merger consideration, all Company stock options will be canceled, without payment of any consideration therefor, and will have no further force or effect.

        Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, each Company restricted stock unit that will become vested, by its terms, as a result of the closing of the merger will automatically be canceled and converted into the right to receive from the surviving corporation an amount of cash equal to the product of (i) the total number of shares of Company common stock then underlying such Company restricted stock unit multiplied by (ii) the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly after the closing of the merger.

        Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, each Company restricted stock unit that will not be vested, by its terms, on or before the closing of the merger will automatically be canceled and converted into the contingent right to receive from the surviving corporation an amount of cash equal to the product of (i) the total number of shares of Company common stock then underlying such Company restricted stock unit multiplied by (ii) the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly following the earlier of (A) the date on which the original vesting conditions applicable to the underlying Company restricted stock unit, including and taking into account any accelerated vesting provisions set forth therein, are satisfied and (B) the date that is 180 days following the closing date, provided that the 180 day period referenced in clause (B) is extended the earlier of the (x) the last day of the tenth month following closing and (y) October 31, 2018 for certain Company restricted stock units granted in July 2017.

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        Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, each Company performance share award that is then outstanding and unvested and that is held by a former employee of the Company (as determined immediately prior to the effective time of the merger) will automatically be canceled and converted into the right to receive from the surviving corporation an amount of cash equal to the product of (i) the target number of shares of Company common stock subject to such Company performance share award, as pro-rated in accordance with the terms of the applicable Company performance share award agreement, multiplied by (ii) the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly after the closing of the merger.

        Except as otherwise agreed upon in writing between the holder and Parent, effective as of immediately prior to the effective time of the merger, each Company performance share award that is then outstanding and unvested and that is held by a person who is an employee of the Company immediately prior to the effective time of the merger will automatically be canceled and converted into the contingent right to receive an amount of cash equal to the product of (i) the target number of shares of Company common stock subject to such Company performance share award multiplied by (ii) the per share merger consideration, without any interest thereon and subject to all applicable withholding, with such amount payable promptly following the earlier of (A) the date on which the original vesting conditions applicable to the underlying Company performance share award, including and taking into aacount any accelerated vesting provisions set forth therein, are satisfied and (B) the date that is 180 days following the closing date, subject to the holder's continued service to the Company through the applicable date; provided that the merger consideration payable in respect of the Company performance share awards will be paid no later than March 15 of the calendar year following the calendar year in which the closing occurs.

        The Board has suspended the Company's employee stock purchase plan indefinitely effective as of July 1, 2017. The Board will terminate the employee stock purchase plan as of immediately prior to the effective time of the merger. During the period from the date of the merger agreement until the termination of the Company's employee stock purchase plan in accordance with the merger agreement, we will not permit any offering periods to occur.

Representations and Warranties

        In the merger agreement, the Company made representations and warranties to Parent and Merger Sub, including those relating to:

    the Company's corporate organization, standing and power;

    the Company's capitalization;

    the Company's subsidiaries;

    the Company's authorization to execute, deliver and perform the merger agreement (including approval of the Board and direction to submit the merger agreement to a stockholder vote and recommendation of stockholder approval) and the enforceability of the merger agreement;

    the absence of conflicts with, or violations of, the Company's organizational documents, applicable laws, contracts or permits, in each case as a result of the Company's execution of the merger agreement or consummation of the merger, and the absence of certain governmental filings and consents in connection with the merger;

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    documents filed by the Company with the SEC, the accuracy and completeness of the financial statements and other information contained therein; this proxy statement; the Company's compliance with the Sarbanes-Oxley Act of 2002, as amended, and the Company's disclosure controls and procedures;

    the absence of certain undisclosed liabilities;

    the absence of a Company Material Adverse Effect (as defined below in the section entitled "—Definition of Company Material Adverse Effect") since April 29, 2017; and the absence of certain other changes or events involving the Company from April 29, 2017 until the date of the merger agreement;

    the Company's filing of tax returns, payment of taxes and other tax matters;

    the Company's leased and owned real property;

    the Company's intellectual property;

    the Company's material contracts;

    the absence of pending or threatened litigation, investigations, judgments or orders involving the Company;

    environmental matters with respect to the Company's operations;

    the Company's employee benefit plans, matters relating to the Employee Retirement Income Security Act of 1974, as amended, and other matters concerning employee benefits and employment agreements;

    the Company's compliance with laws, including the U.S. Foreign Corrupt Practices Act of 1977 and export control laws;

    the Company's possession of and compliance with permits, licenses and franchises to conduct its business;

    the Company's employees and other labor matters;

    the receipt by the Board of opinions from Barclays and Morgan Stanley of the fairness, from a financial point of view, of the merger consideration to holders of the Company common stock;

    the absence of undisclosed obligations to brokers and investment bankers;

    the inapplicability to the merger of the restrictions set forth in Section 203 of the DGCL;

    the Company's insurance policies; and

    certain of the Company's suppliers.

        In the merger agreement, Parent and Merger Sub made representations and warranties to the Company, including those relating to:

    Parent's and Merger Sub's corporate organization, standing and power;

    Parent's and Merger Sub's authorization, execution, delivery, performance and the enforceability of the merger agreement;

    the absence of conflicts with, or violations of, Parent's and Merger Sub's organizational documents, applicable laws, contracts or permits, in each case as a result of their execution of the merger agreement or consummation of the merger; the absence of certain governmental filings and consents in connection with the merger;

    the absence of any vote required by holders of Parent's securities in connection with the merger;

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    the information provided by Parent and Merger Sub in writing for inclusion in this proxy statement;

    the operations of Merger Sub;

    the execution, delivery and enforceability of the debt and equity commitment letters, and the absence of any breach or default under the debt and equity commitment letters;

    the enforceability of, and absence of default under, the limited guarantee executed and delivered by the guarantors;

    the solvency of the surviving corporation as of the effective time and immediately after consummation of the transactions contemplated by the merger agreement;

    the inapplicability to the merger of the restrictions set forth in Section 203 of the DGCL;

    the absence of pending or threatened litigation, investigations, judgments or orders involving Parent or Merger Sub;

    the disclosure to the Company of all agreements and understandings between Parent, Merger Sub or the guarantors and any member of the Board or of management of the Company;

    the absence of any agreements or understandings pursuant to which any stockholder of the Company would be entitled to receive consideration of a different amount or nature other than the merger consideration or be obligated to vote the merger agreement or approve the merger agreement against a superior proposal;

    the absence of obligations to brokers and investment bankers for which the Company or any of its subsidiaries would have any obligations or liabilities prior to the effective time;

    the due diligence investigation of Parent and Merger Sub;

    acknowledgment by Parent and Merger Sub of the absence of representations and warranties by the Company not set forth in the merger agreement; and

    Parent's and Merger Sub's non-reliance on Company estimates, projections, forecasts, forward-looking statements and business plans.

Definition of Company Material Adverse Effect

        Several of the representations and warranties made by the Company in the merger agreement and certain conditions to the performance by Parent and Merger Sub of their obligations under the merger agreement are qualified by reference to whether the item in question would have a "Company Material Adverse Effect." The merger agreement provides that a "Company Material Adverse Effect" means any effect, change, event, occurrence or development that is materially adverse to the business, financial condition or results of operations of the Company and its subsidiaries, taken as a whole. However, no effect, change, event, occurrence or development (by itself or when aggregated or taken together with any and all other effects, changes, events, occurrences or developments) to the extent resulting from, arising out of, attributable to, or related to any of the following will be deemed to be or constitute a "Company Material Adverse Effect:"

    general economic conditions (or changes in such conditions) or conditions in the global economy generally;

    conditions (or changes in such conditions) in the securities markets, credit markets, currency markets or other financial markets;

    conditions (or changes in such conditions) in the industries in which the Company and its subsidiaries conduct business;

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    political conditions (or changes in such conditions) or acts of war, sabotage or terrorism;

    earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events;

    the announcement of the merger agreement or the pendency or consummation of the transactions contemplated by the merger agreement, including (i) the identity of Parent and (ii) the loss or departure of officers or other employees of the Company or any of its subsidiaries directly resulting from, arising out of, attributable to, or related to the transactions contemplated by the merger agreement;

    the taking of any action expressly required by the merger agreement or the failure to take any action expressly prohibited by the merger agreement;

    changes in law or other legal or regulatory conditions (or the interpretation thereof) or changes in GAAP or other accounting standards (or the interpretation thereof);

    changes in the Company's stock price or the trading volume of the Company's stock, or any failure by the Company to meet any public estimates or expectations of the Company's revenue, earnings or other financial performance or results of operations for any period, or any failure by the Company or any of its subsidiaries to meet any internal budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations (but not, in each case, the underlying cause of such changes or failures, unless such changes or failures would otherwise be excepted from this definition); and

    any litigation related to the merger agreement, the merger or other transactions contemplated by the merger agreement brought by any of the current or former stockholders of the Company (on their own behalf or on behalf of the Company) against the Company, Merger Sub, Parent or any of their directors or officers;

except to the extent such effects, changes, events, occurrences or developments to the extent resulting from, arising out of, attributable to or related to the matters described in the first, second, third, fourth, fifth and eighth bullets above disproportionately adversely affect the Company and its subsidiaries, taken as a whole, as compared to other companies that conduct business in the countries and regions in the world and in the industries in which the Company and its subsidiaries conduct business in any material respect (in which case, such adverse effects (if any) will be taken into account when determining whether a "Company Material Adverse Effect" has occurred or may, would or could occur solely to the extent they are disproportionate).

Definition of Parent Material Adverse Effect

        Certain of the representations and warranties made by Parent and Merger Sub in the merger agreement and certain conditions to the performance of the Company's obligations under the merger agreement are qualified by reference to whether the item in question would have a "Parent Material Adverse Effect." The merger agreement provides that a "Parent Material Adverse Effect" means any change, event or development that would reasonably be expected to prevent, or materially impair or delay, the ability of Parent or Merger Sub to consummate the merger or any of the other transactions contemplated by the merger agreement or otherwise perform any of its obligations under the merger agreement.

Covenants Relating to the Conduct of the Company's Business

        Except as otherwise expressly contemplated or required by the merger agreement, as required by applicable law or by certain material contracts in effect on the date of the merger agreement and made available to Parent, as set forth in the Company Disclosure Schedule, or with Parent's prior written

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consent, during the period beginning on the date of the merger agreement and ending at the earlier to occur of the effective time of the merger or the termination of the merger agreement, the Company and its subsidiaries will use commercially reasonable efforts to act and carry on its business in the ordinary course of business, to preserve intact its business organization and to preserve satisfactory business relationships with its significant suppliers and material customers, licensors, licensees, lessors, governmental entities, creditors and others having material business dealings with the Company. Furthermore, except as otherwise expressly contemplated or required by the merger agreement, as required by applicable law, as set forth in the Company Disclosure Schedule, or with Parent's prior written consent, until the earlier to occur of the effective time of the merger and the termination of the merger agreement, the Company will not, and will not permit any of its subsidiaries to, do any of the following:

    declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock (other than dividends and distributions by a direct or indirect wholly-owned subsidiary of the Company to its parent);

    split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or any of its other securities;

    purchase, redeem or otherwise acquire any shares of its capital stock or any other of its securities or any rights, warrants or options to acquire any such shares or other securities, except for certain exceptions;

    issue, deliver, sell, grant, pledge or otherwise dispose of or subject to any lien any shares of its capital stock, any other voting securities or any securities convertible into or exchangeable for, or any rights, warrants or options to acquire, any such shares, voting securities or convertible or exchangeable securities, except for certain exceptions;

    amend the Company's or any of its subsidiaries' certificate of incorporation, by-laws or other comparable charter or organizational documents, except for certain exceptions;

    acquire in any manner any business or any corporation, partnership, joint venture, limited liability company, association or other business organization or division thereof;

    acquire any assets, rights or properties, except purchases of inventory and raw materials in the ordinary course of business;

    sell, lease, license, pledge, mortgage or otherwise dispose of or subject to any lien (other than liens arising in connection with immaterial security deposit or cash collateral arrangements) any properties, rights or assets of the Company or any of its subsidiaries other than sales of inventory and disposition of obsolete equipment in the ordinary course of business;

    adopt any stockholder rights plan;

    adopt a plan of complete or partial liquidation, dissolution, recapitalization, restructuring or other reorganization;

    subject to certain exceptions, merge or consolidate with any person;

    incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, except for certain exceptions;

    issue, sell or amend any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of

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      another person or enter into any arrangement having the economic effect of any of the foregoing;

    make any loans, advances or capital contributions to, or investment in, any other person for business expenses, other than the Company or any of its direct or indirect wholly-owned subsidiaries, except for certain exceptions;

    enter into any hedging agreement or other financial agreement or arrangement designed to protect the Company or its subsidiaries against fluctuations in exchange rates;

    make any capital expenditures or other expenditures with respect to property, plant or equipment, other than to the extent included in and in accordance with (both as to quantum and the planned timing with respect thereto) the Company's budget for capital expenditures as provided to Parent;

    make any payments in respect of fees (except for certain exceptions) to any of the financial advisors or the legal or accounting service providers retained by the Company or any of its subsidiaries in connection with the merger agreement or the transactions contemplated thereby;

    make any material changes in accounting methods, principles or practices, except insofar as may be required by a change in GAAP;

    establish, adopt, enter into, terminate or amend any Company employee plan, or any other employment, severance or similar agreement or compensation or benefit plan or arrangement, for the benefit or welfare of any current or former independent contractor, employee, director, manager or officer (except for certain exceptions) of the Company or any of its subsidiaries or, for employment outside the United States, only to the extent required by applicable law, or any collective bargaining or similar agreement (unless required to do so by applicable law);

    increase in any respect the compensation, benefits or severance or termination pay of, or pay any bonus to, any current or former independent contractor, employee, director, manager or officer (except for certain exceptions);

    accelerate the payment, funding, right to payment or vesting of any compensation or benefits, other than as expressly contemplated by the merger agreement;

    hire or terminate (other than for "cause") any employee or officer of the Company or its subsidiaries with annual compensation (assuming any bonuses are paid at target) in excess of $200,000 (except for certain exceptions);

    grant any stock options, restricted stock units, stock appreciation rights, stock based or stock related awards, performance units, restricted stock or other equity-based awards;

    implement or announce any employee layoffs of 500 or more associates or location closings;

    enter into certain material contracts;

    terminate certain material contracts, except as a result of a material breach or a material default by the counterparty thereto or as a result of the expiration of such contract in accordance with its terms as in effect on the date of the merger agreement;

    amend, waive or modify in a manner that is materially adverse to the Company and its subsidiaries, taken as a whole, certain material contracts;

    enter into certain material contracts that contain a change in control or similar provision that pursuant to its terms would require a payment to the other party or parties thereto in connection with the transactions contemplated by the merger agreement or any subsequent change in control of the Company or any of its subsidiaries;

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    settle any action, suit, proceeding, claim, arbitration or investigation, except for certain exceptions;

    enter into any new line of business;

    change or revoke any material tax election or make any material tax election inconsistent with past practice;

    file any material amended tax return with respect to any tax;

    surrender any right to a material refund of taxes;

    change any material method of accounting for tax purposes, except as required by law or GAAP;

    settle or compromise any material tax claim or assessment;

    engage in any transaction or enter into any contract that would require disclosure under Item 404 of Regulation S-K promulgated under the Exchange Act;

    other than in the ordinary course of business, materially reduce the amount of insurance coverage under existing insurance policies or fail to renew or replace any material existing insurance policies; or

    authorize any of, or commit or agree, in writing or otherwise, to take any of, the foregoing actions.

Covenants Relating to the Conduct of Parent's and Merger Sub's Business

        Except as otherwise expressly contemplated or permitted by the merger agreement or as required by applicable law, during the period beginning on the date of the merger agreement and ending at the earlier to occur of the effective time of the merger or the termination of the merger agreement:

    neither Parent nor Merger Sub will, without the prior consent of the Company, take or cause to be taken any action that would be reasonably expected to materially delay, impair or prevent the consummation of the transactions contemplated by the merger agreement, or enter into any agreement to take any such action, and

    Merger Sub will not engage in any activity of any nature except for activities related to or in furtherance of the merger and the other transactions contemplated by the merger agreement.

Restrictions on Solicitation of Other Offers

        Under the merger agreement, until the earlier of the effective time of the merger and the termination of the merger agreement, the Company and its subsidiaries will not, and the Company will cause its and its subsidiaries' officers and directors not to, and will use reasonable efforts to cause its and its subsidiaries' other representatives not to, directly or indirectly:

    solicit, initiate, knowingly facilitate or knowingly encourage (including by way of providing non-public information) any inquiries or the making of any proposal or offer that constitutes, or that would reasonably be expected to lead to, any acquisition proposal;

    amend or grant a waiver or release, or publicly authorize or agree to enter into an amendment, waiver or release, under (i) any standstill or similar agreement with respect to any Company common stock (other than for Parent or its affiliates) or (ii) any applicable anti-takeover law or anti-takeover provision in the certificate of incorporation or by-laws (other than for Parent or its affiliates), except, in each case, under the circumstances permitted under the merger agreement; or

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    enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish or provide access to any non-public information to any person who has made or would reasonably be expected to make, any acquisition proposal or otherwise for the purpose of encouraging or facilitating, any acquisition proposal.

        However, subject to compliance with the merger agreement, at any time prior to receipt of the Company stockholder approval the Company may, if the Board determines that failure to take such action would be inconsistent with its fiduciary duties:

    furnish non-public information with respect to the Company and its subsidiaries to any person who has made an acquisition proposal that did not result from a material breach of the merger agreement that the Board determines in good faith (after consultation with outside counsel and its financial advisor) is, or could reasonably be expected to lead to, a superior proposal, which we refer to as a qualified person, pursuant to a confidentiality agreement not materially less restrictive in any substantive manner, including with respect to standstill provisions, than the confidentiality agreement between the Company and Sycamore (and which confidentiality agreement may not include an obligation of the Company to reimburse such person's expenses);

    engage in discussions or negotiations (including solicitation of revised acquisition proposals) with any qualified person regarding any acquisition proposal; or

    amend, or grant a waiver or release under, any standstill or similar agreement with respect to any Company common stock with any qualified person solely to allow for an acquisition proposal to be made in a confidential manner to the Company or the Board.

        An "acquisition proposal" means any written:

    proposal or offer for a merger, consolidation, dissolution, recapitalization, share exchange, tender offer or other business combination involving the Company and its subsidiaries (other than (i) mergers, consolidations, recapitalizations, share exchanges or other business combinations involving solely the Company and/or one or more subsidiaries of the Company and (ii) mergers, consolidations, recapitalizations, share exchanges, tender offers or other business combinations that if consummated would result in the holders of the outstanding shares of Company common stock immediately prior to such transaction owning more than 80% of the equity securities of the Company, or any successor or acquiring entity, immediately thereafter);

    proposal for the direct or indirect disposition, sale or issuance by the Company of 20% or more of any class of its equity securities; or

    proposal or offer to acquire, combine, license, reorganize or subject to a joint venture, in any manner, directly or indirectly, 20% or more of the equity securities or consolidated total assets of the Company and its subsidiaries;

in each case other than the transactions contemplated by the merger agreement or any offer or proposal by Parent or any subsidiary of Parent.

        A "superior proposal" means any bona fide acquisition proposal made by a third party after the date of the merger agreement to acquire, directly or indirectly, more than 50% of the equity securities or consolidated total assets of the Company and its subsidiaries, (i) on terms which the Board determines in its good faith judgment to be more favorable to the holders of Company common stock than the transactions contemplated by the merger agreement (after consultation with its financial and legal advisors), taking into account all the terms and conditions of such proposal (including financial, regulatory, legal and other aspects of such proposal) and the merger agreement (including any written, binding offer by Parent to amend the terms of the merger agreement) that the Board determines to be relevant and (ii) which the Board determines to be reasonably capable of being completed on the terms proposed, taking into account all financial, regulatory, legal and other aspects of such proposal that the

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Board determines to be relevant. In no event will an acquisition proposal be considered a "superior proposal" if it was solicited, initiated, facilitated, encouraged or negotiated in material breach of the merger agreement by the Company.

        The Company must, within one business day, advise Parent orally and in writing of the Company's or any of its subsidiaries' or any of their respective representatives' receipt of any acquisition proposal or request for material non-public information or access to the Company or its representatives by any third party that the Company reasonably believes is related to an acquisition proposal or potential acquisition proposal, including the material terms and conditions of any such request for information or access or acquisition proposal and the identity of the person making any such acquisition proposal. Thereafter, the Company must keep Parent informed on a reasonably prompt basis of any material developments with respect to any such request for information or access or acquisition proposal, including with respect to the terms and status thereof and whether any such acquisition proposal has been withdrawn or rejected and must provide Parent written notice of any such withdrawal or rejection and copies of any written request for information or access or acquisition proposal within 48 hours. Neither the Company nor any of its subsidiaries will enter into any confidentiality agreement subsequent to the date of the merger agreement which prohibits the Company from providing to Parent the information or access required to be provided to Parent pursuant to this provision of the merger agreement.

        Under the merger agreement, the Company agreed to, and agreed to cause its subsidiaries to, and agreed to direct their respective representatives to, except with respect to Parent and Merger Sub:

    cease immediately all solicitations, discussions and negotiations that commenced prior to the date of the merger agreement regarding any proposal that constitutes, or could reasonably be expected to lead to, an acquisition proposal;

    request the prompt return or destruction of all confidential or non-public information or access previously furnished to any person within the last twelve months of the date of the merger agreement for the purpose of evaluating a possible acquisition proposal; and

    terminate access to any physical or electronic data rooms relating to a possible acquisition proposal.

Restrictions on Changes of Recommendation to Company Stockholders

        Under the merger agreement, the Board must submit the merger agreement to the Company's stockholders for adoption and must recommend that the Company's stockholders vote in favor of adopting the merger agreement. Prior to the earlier of the effective time of the merger and the termination of the merger agreement:

    the Board may not (we refer to each of the actions listed in the following five sub-bullets as a Company board recommendation change):

    withhold, withdraw or modify, or publicly propose to withhold, withdraw or modify, in each case in a manner adverse to Parent, its recommendation to the Company's stockholders that the Company's stockholders adopt the merger agreement at the special meeting, which we refer to as the recommendation;

    fail to include the recommendation in this proxy statement;

    fail to publicly reaffirm the recommendation within five business days of a request therefor in writing by Parent following the public disclosure of an acquisition proposal with any person other than Parent and Merger Sub;

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      fail to recommend against any acquisition proposal that is a tender offer or exchange offer within ten business days after the commencement thereof; or

      publicly announce an intention or resolution to effect any of the foregoing;

    the Company and its subsidiaries may not enter into, or publicly authorize or agree to enter into, any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or similar agreement relating to any acquisition proposal (other than a confidentiality agreement entered into in the circumstances described above in the section entitled "—Restrictions on Solicitations of Other Offers");

    the Board may not adopt, approve, endorse or recommend, or publicly propose to adopt, approve, endorse or recommend, any acquisition proposal.

        However, prior to receipt of the Company stockholder approval, the Board may, (i) in response to a superior proposal that did not result from a material breach of the merger agreement, either effect a board recommendation change or cause the Company to terminate the merger agreement, provided that concurrently with or prior to such termination, the Company pays to Parent the company termination fee as required by the merger agreement and, immediately after the termination of the merger agreement, the Company enters into a definitive agreement providing for such superior proposal, or (ii) in response to an intervening event, effect a board recommendation change if, and only if, (in the case of either (i) or (ii)):

    the Board has determined in good faith (after consultation with outside counsel) that the failure to effect a board recommendation change would be reasonably likely to be inconsistent with its fiduciary duties under applicable law;

    the Company has notified Parent in writing that it intends to effect a board recommendation change or termination of the merger agreement, describing in reasonable detail the reasons for such intended board recommendation change or termination, which we refer to as a recommendation change notice;

    if requested by Parent, the Company will have made itself and its subsidiaries and its and their respective representatives available and the Company will have and will have caused its subsidiaries and its and their respective representatives to discuss and negotiate with Parent's representatives any proposed modifications to the terms and conditions of the merger agreement (in a manner that would obviate the need to effect such board recommendation change) during the four business day period following delivery by the Company to Parent of such recommendation change notice (it being understood that if there are any material amendments, revisions or changes to the terms of any such superior proposal (including any revision to the amount, form or mix of consideration the Company's stockholders would receive as a result of the superior proposal, whether or not material), the Company will notify Parent of each such amendment, revision or change and the applicable four business day period described above will be extended for at least two business days from the date of such notice), which we refer to as a notice period; and

    at the end of such notice period, the Board has determined in good faith (after consultation with outside legal counsel), after considering any modified terms and conditions proposed by or on behalf of Parent, that the failure to effect a board recommendation change would be reasonably likely to be inconsistent with its fiduciary duties under applicable law and, with respect to a board recommendation change in response to a superior proposal, the Board has determined in good faith (after consultation with its financial advisor and outside legal counsel) that such initial or revised (as applicable) superior proposal continues to constitute a superior proposal.

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        Nothing contained in the merger agreement prohibits the Company or the Board from:

    taking and disclosing to its stockholders a position with respect to a tender offer contemplated by Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act, or from issuing a "stop, look and listen" statement pending disclosure of its position thereunder (none of which, in and of itself, will be deemed to constitute a board recommendation change); or

    making any disclosure to the Company's stockholders if, in the good faith judgment of the Board, after consultation with outside counsel, failure to so disclose would be reasonably likely to be inconsistent with its fiduciary duties under applicable law.

        However, in no event may the Board make a board recommendation change except to the extent expressly permitted by, and in accordance with, the provisions of the merger agreement described above.

Additional Agreements of the Parties to the Merger Agreement

Listing of Company Common Stock

        Until the effective time, the Company must use its commercially reasonable efforts to continue the listing of Company common stock on the Nasdaq Stock Market.

Access to Information

        Until the earlier to occur of the effective time of the merger and the termination of the merger agreement, the Company and its subsidiaries will afford to Parent and Parent's representatives reasonable access, upon reasonable notice, during normal business hours and in a manner that does not unreasonably disrupt or interfere with business operations, to all of its properties, books, contracts and records as Parent may reasonably request, and, during such period, the Company and its subsidiaries will promptly make available to Parent (i) a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of federal or state securities laws and (ii) all other information concerning its business, properties and assets as Parent may reasonably request, except for certain exceptions. Prior to the closing of the merger, neither Parent nor Merger Sub will (and each will cause its affiliates and representatives not to) contact or communicate with any of the employees, customers, licensors or suppliers of the Company or any of its subsidiaries, without the prior written consent of the Company.

Legal Conditions to the Merger

        Parent and the Company must each use its reasonable best efforts to:

    take, or cause to be taken, all actions, and do, or cause to be done, and to assist and cooperate with the other parties to the merger agreement in doing, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by the merger agreement as promptly as practicable;

    as promptly as practicable, obtain any consents, licenses, permits, waivers, approvals, authorizations, or orders required to be obtained by such party (or any of its subsidiaries) from any governmental entity or third party in connection with the authorization, execution and delivery of the merger agreement and the consummation of the transactions contemplated thereby, except that in no event will Parent or the Company or any of their respective subsidiaries be required to pay any monies (except for filings or similar fees) or (except, in the case of Parent or its subsidiaries, as described below) agree to any material undertaking in connection with any of the foregoing;

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    as promptly as practicable, make all necessary filings, and thereafter make any other required submissions, with respect to the merger agreement and the merger required under (i) the Exchange Act, and any other applicable federal or state securities laws, (ii) the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and any related governmental request thereunder and (iii) any other applicable law;

    contest and resist any action, including any administrative or judicial action, and seek to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order (whether temporary, preliminary or permanent), which we refer to as a restrictive order, which has the effect of making the merger illegal or otherwise prohibiting consummation of the merger or the other transactions contemplated by the merger agreement; and

    execute or deliver any additional instruments necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, the merger agreement.

        Parent must propose, negotiate, offer to commit and effect (and if such offer is accepted, commit to and effect), by consent decree, hold separate order or otherwise, the sale, divestiture or disposition of such assets or businesses of Parent or, effective as of the effective time of the merger, the surviving corporation, or their respective subsidiaries, or otherwise offer to take or offer to commit to take any action which it is capable of taking and if the offer is accepted, take or commit to take such action that limits its freedom of action with respect to, or its ability to retain, any of the businesses, services or assets of Parent, the surviving corporation or their respective subsidiaries, in order to avoid the entry of, or to effect the dissolution of, any restrictive order, which would have the effect of preventing or delaying the closing beyond the outside date, provided that Parent will not be obligated to take any such action unless the taking of such action is expressly conditioned upon the consummation of the merger.

Public Disclosure

        Except as may be required by law or stock market regulations, Parent and the Company must mutually agree upon the form and substance of:

    any widespread internal written communications that may be made by the Company to its officers, employees, independent contractors, consultants, directors, suppliers, customers, contract counterparties and/or other business relations of the Company or its subsidiaries with respect to the merger, the merger agreement and the transactions contemplated thereby; and/or

    any other press release or other public statement with respect to the merger, the merger agreement and the transactions contemplated thereby.

        In addition, the Company must use its commercially reasonable efforts to consult with Parent prior to making any widespread internal oral communications to its employees.

Indemnification

        For six years following the effective time of the merger, Parent and the Company have agreed that all rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the effective time of the merger and rights to advancement of expenses relating thereto now existing in favor of any person who is now, or has been at any time prior to the date of the merger agreement, or who becomes prior to the effective time of the merger, an officer, director or manager of the Company or any of its subsidiaries, who we refer to as an indemnified party, whether provided in the organizational documents of the Company or any of its subsidiaries or in any indemnification agreement between any indemnified party and the Company or any of its subsidiaries, will survive the merger and continue in full force and effect, and may not be amended, repealed or otherwise modified in any manner that would adversely affect any right thereunder of any indemnified party.

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        For six years following the effective time of the merger, Parent and the surviving corporation have agreed to maintain provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of present and former directors and officers of the Company and its subsidiaries in respect of acts or omissions occurring or alleged to have occurred at or prior to the effective time of the merger as contained in the certificate of incorporation and by-laws of the Company in effect on the date of the merger agreement.

        Parent has also agreed to either:

    maintain in effect for six years from the effective time of the merger the Company's existing directors' and officers' liability insurance policy with respect to matters existing or occurring at or prior to the effective time of the merger (including the transactions contemplated by the merger agreement), so long as the annual premiums would not exceed more than 300% of the current annual premium paid for the Company's directors' and officers' liability insurance policy, which we refer to as the Maximum Premium; or

    (ii) purchase a "tail" policy for an annual cost not to exceed the Maximum Premium and maintain such "tail" policy in full force and effect for six years from the effective time of the merger.

        Notwithstanding the foregoing, the Company may, prior to the effective time of the merger, elect to purchase its own "tail" policy using a nationally recognized broker selected by Parent in consultation with the Company, as long as such "tail" policy does not cost more than the Maximum Premium.

        In the event Parent or the surviving corporation or any of their respective successors or assigns (i) consolidates with or merges into any other person and will not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any person, then, and in each such case, proper provision will be made so that the successors and assigns of Parent or the surviving corporation, as the case may be, will assume and succeed to the obligations described above.

        If any indemnified party makes any claim for indemnification or advancement of expenses under these provisions of the merger agreement that is denied by Parent and/or the Company or the surviving corporation, and a court of competent jurisdiction determines that the indemnified party is entitled to such indemnification or advancement of expenses, then Parent, the Company or the surviving corporation will pay the indemnified party's costs and expenses, including reasonable legal fees and expenses, incurred by the indemnified party in connection with pursuing his or her claims to the fullest extent permitted by law.

Notification of Certain Matters

        Prior to the effective time, Parent must give prompt notice to the Company, and the Company must give prompt notice to Parent, of:

    the occurrence, or failure to occur, of any event, which occurrence or failure to occur is reasonably likely to cause any representation or warranty of such party contained in the merger agreement to be untrue or inaccurate in any manner that would result in the failure of a closing condition;

    any material breach by such person of any covenant or agreement set forth in the merger agreement;

    any written notice or other written communication from any governmental entity or counterparty to certain material contracts alleging that the consent of such governmental entity or such counterparty, as applicable, is required in connection with the transactions contemplated by the merger agreement; or

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    any actions, suits claims or proceedings commenced or, to its knowledge, threatened in writing against such person or any of its subsidiaries that relate to the consummation of the transactions contemplated by the merger agreement.

Employee Benefits Matters

        For a period of one year following the effective time (or, if shorter, the period of employment of the relevant Company employee), Parent must provide, or must cause to be provided, (i) to each Company employee a total compensation package no less favorable in the aggregate than the total compensation package (including base salary or wage rates, commissions and target annual cash bonus opportunities but excluding the value of annual equity awards and cash payments in lieu of equity awards) provided to such Company employee immediately before the effective time and (ii) to all Company employees in the aggregate other employee benefits (other than the Company employee stock purchase plan, long-term incentive or defined benefit pension or equity awards or cash payments in lieu thereof) that are substantially comparable, in the aggregate, to the other benefits provided to such Company employees immediately before the effective time.

        For purposes of vesting and eligibility to participate (but not for accrual or level of benefits) under the employee benefit plans of Parent and its subsidiaries providing benefits to any Company employees after the effective time, each Company employee must, subject to applicable law and applicable tax qualification requirements, be credited with his or her years of service with the Company and its subsidiaries and their respective predecessors before the effective time, to the same extent as such Company employee was entitled, before the effective time, to credit for such service under any similar Company employee plan in which such Company employee participated or was eligible to participate immediately prior to the effective time, except that the foregoing will not apply to the extent that its application would result in a duplication of benefits.

        If any Company employee (who is not otherwise a party to an employment agreement, offer letter or similar agreement or arrangement or any amendment or supplement of any of the foregoing, in each case that provides for a different treatment with respect to severance) whose employment is terminated on or prior to the first anniversary of the effective time under circumstances under which such Company employee would have received severance benefits under the Company severance policy, Parent will cause the surviving corporation to provide that such Company employee will be entitled to severance benefits from the surviving corporation that are no less favorable than the severance benefits that would have been granted under the Company severance policy as in existence on the date of the merger agreement and will notify such Company employee of such benefits in a manner consistent with the Company's past practices prior to the date of the merger agreement.

        From and after the effective time, Parent must cause the surviving corporation and its subsidiaries to assume, in accordance with their terms, all obligations of the Company under contracts, agreements, arrangements, policies, plans and commitments of the Company and the subsidiaries of the Company as in effect immediately prior to the date hereof and in the form provided to Parent prior to the date hereof that are applicable to any current or former employees or directors of the Company or any subsidiary of the Company, including any employment, severance, and termination plans and agreements.

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        All provisions contained in the merger agreement with respect to employee benefit plans or employee compensation are included for the sole benefit of the respective parties and shall not create any right (including any third party beneficiary rights) in any other person, including any employee or former employee of the Company or any of its subsidiaries or any participant or beneficiary in any Company employee plan. Nothing in the merger agreement (i) will require Parent, the surviving corporation or any of their subsidiaries to continue to employ any particular Company employee following the effective time or to provide any right to a particular term or condition of employment, (ii) will, for a period of one year following the effective time, permit the reduction of the existing severance or acceleration benefits in effect on the date of the merger agreement for any Company employee, or (iii) except as provided in the foregoing clause (ii), will be construed to prohibit Parent, the surviving corporation or any of their subsidiaries from amending or terminating any employee benefit plan in accordance with its terms or to amend or create any employee benefit plan or any similar plan or agreement from Parent or its affiliates.

        Notwithstanding the foregoing (other than potentially with respect to severance), employees located outside the United States or covered by collective bargaining agreements will be treated instead in accordance with applicable contracts (after taking into account the assumptions of contracts described above) and applicable law.

State Takeover Laws

        The Company and the Board must not take any action that would cause any anti-takeover or other similar law to become applicable to restrict or prohibit the merger or any other transactions contemplated by the merger agreement. If any "fair price," "business combination" or "control share acquisition" statute or other similar statute or regulation is or may become applicable to any of the transactions contemplated by the merger agreement, the parties to the merger agreement must use their respective reasonable best efforts to (i) take such actions as are reasonably necessary so that the transactions contemplated under the merger agreement may be consummated as promptly as practicable on the terms contemplated under the merger agreement and (ii) otherwise take all such actions as are reasonably necessary to eliminate or, if unable to be eliminated, minimize the effects of any such statute or regulation on such transactions.

Rule 16b-3

        Prior to the effective time of the merger, the Company must take all reasonable steps as may be required to cause any dispositions of Company equity securities (including derivative securities) pursuant to the transactions contemplated by the merger agreement by each individual who is a director or officer of the Company and who would otherwise be subject to Rule 16b-3 under the Exchange Act to be exempt under under such rule to the extent permitted by applicable law.

Financing

        Each of Parent and Merger Sub must use, and must cause their respective affiliates to use, reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and obtain the financing pursuant to the debt commitment letter, which we refer to as the debt financing, and the financing pursuant to the equity commitment letters, which we refer to as the equity financing, on the terms and subject only to the conditions set forth in the debt commitment letter and the equity commitment letters. We refer to the debt financing together with the equity financing as the financing. We refer to the debt commitment letter together with the equity commitment letters as the financing letters. The reasonable best efforts

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of Parent and Merger Sub mentioned in the first sentence of this paragraph include reasonable best efforts to:

    maintain in effect and comply with the financing letters;

    negotiate and enter into definitive agreements with respect to the debt financing on the terms and subject only to the conditions set forth in the debt commitment letter;

    satisfy (and cause its affiliates to satisfy) on a timely (taking into account the marketing period) basis all conditions applicable to Parent and its affiliates in the financing letters and the definitive agreements related thereto (or, if necessary or deemed advisable by Parent, seek the waiver of conditions applicable to Parent and Merger Sub contained in such financing letter or such definitive agreements related thereto);

    consummate the financing at or prior to the closing date;

    enforce its rights under the financing letters and the definitive agreements relating to the financing; and

    comply with its covenants and other obligations under the financing letters and the definitive agreements relating to the financing.

        Parent must not, and must not permit any of its affiliates to, take any action not otherwise required under the merger agreement that is a breach of, or would result in termination of, any of the financing letters. Parent, Merger Sub and the guarantors must not, without the prior written consent of the Company, agree to or permit any termination of or amendment, supplement or modification to be made to, or grant any waiver of any provision under, the financing letters or the definitive agreements relating to the financing if such termination, amendment, supplement, modification or waiver would be reasonably likely to (we refer to amendments described in the three following bullets as prohibited amendments):

    (i) reduce (or could have the effect of reducing) the aggregate amount of any portion of the debt financing unless an alternative source of the equity financing or other financing is increased by a corresponding amount or (ii) reduce the amount of equity financing unless the debt financing or alternative financing is increased by a corresponding amount, so long as in the case of clauses (i) and (ii), the terms of such financing would not constitute a prohibited amendment under the two bullets immediately below;

    adversely impact the ability of Parent or Merger Sub, as applicable, to enforce its rights against other parties to the financing letters or the definitive agreements with respect to the financing; or

    impose new or additional conditions precedent to the availability of the financing or otherwise expand, amend or modify any of the conditions precedent to the financing, or otherwise expand, amend or modify any other provision of the financing letters in a manner that could reasonably be expected to materially delay or prevent or make less likely to occur the funding of the financing (or satisfaction of the conditions to the financing) on the closing date.

        Parent must keep the Company informed on a current basis and in reasonable detail, upon reasonable request by the Company, of the status of its efforts to arrange the debt financing and provide to the Company drafts (reasonably in advance of execution) and thereafter complete, correct and executed copies of the material definitive documents for the debt financing. Parent and Merger Sub must give the Company prompt notice:

    of any actual breach, default (or any event that, with or without notice, lapse of time or both, would reasonably be expected to give rise to any default or breach), termination, cancellation or

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      repudiation by any party to any of the financing letters or definitive documents related to the financing of which Parent or Merger Sub becomes aware;

    of the receipt of any written notice or other written communication from any financing source with respect to any (i) actual or potential breach, default, termination, cancellation or repudiation by any party to any of the financing letters or any definitive document related to the financing of any provisions of the financing letters or any definitive document related to the financing or (ii) material dispute or disagreement between or among any parties to any of the financing letters or any definitive document related to the financing with respect to the conditionality or amount of the financing or the obligation to fund the financing or the amount of the financing to be funded at the closing (but excluding ordinary course negotiations); and

    of the occurrence of an event or development that could reasonably be expected to adversely impact the ability of Parent or Merger Sub to obtain all or any portion of the financing contemplated by the financing letters in an amount sufficient to consummate the transactions contemplated by the merger agreement.

        As soon as reasonably practicable, but in any event within two business days of the date the Company delivers to Parent or Merger Sub a written request, Parent and Merger Sub must provide any information reasonably requested by the Company relating to any circumstance referred to in the three bullets immediately above. If any portion of the debt financing becomes unavailable on the terms and conditions (including any applicable market flex provisions) contemplated by the debt commitment letter and alternative financing (so long as the terms thereof are of the type that would not constitute a prohibited amendment, as described above) or an increase in the equity financing is not then made available in an amount equal to such portion, and such portion is required to fund the aggregate merger consideration and all fees, expenses and other amounts contemplated to be paid by Parent pursuant to the merger agreement, Parent must promptly notify the Company in writing and Parent and Merger Sub must use their reasonable best efforts to arrange and obtain in replacement thereof, and negotiate and enter into definitive agreements with respect to, alternative financing from alternative sources in an amount sufficient to consummate the transactions contemplated by the merger agreement with terms and conditions (including market flex provisions) not materially less favorable, taken as a whole, to Parent and Merger Sub (or their respective affiliates) than the terms and conditions set forth in the debt commitment letter, as promptly as practicable following the occurrence of such event but no later than the final day of the marketing period. In no event will the reasonable best efforts of Parent be deemed or construed to require Parent to (i) pay fees materially in excess of those contained in the debt commitment letter (including the market flex provisions) or agree to market flex terms materially less favorable to Parent than the corresponding market flex terms contained in or contemplated by the debt commitment letter or (ii) enter into any alternative financing the terms of which are materially less favorable to Parent than those contained in the debt commitment letter on the date of the merger agreement (taken as a whole).

        In the event that (i) any portion of the debt financing anticipated under the debt commitment letter to be structured as a high yield bond financing is unavailable, regardless of the reason therefor, and such amount is not funded through a securities demand under the debt commitment letter, (ii) all closing conditions applicable to Parent and Merger Sub have been satisfied or waived (other than any such conditions that by their nature are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions at the closing, and those conditions the failure of which to be satisfied is attributable to a breach by Parent or Merger Sub of their representations, warranties, covenants or agreements contained in the merger agreement) and (iii) a bridge facility contemplated by the debt commitment letter (or an alternative bridge facility or other financing obtained in accordance with the merger agreement) is available on the terms described in the debt commitment letter, then Parent and Merger Sub must cause the applicable financing sources to fund such bridge financing in accordance

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with the terms of the debt commitment letter and the proceeds shall be used in lieu of the affected portion of the high yield bond financing.

        Prior to the closing date, the Company must use its reasonable best efforts to provide, and to cause its subsidiaries to provide, to Parent and Merger Sub, in each case at Parent's sole cost and expense, such reasonable cooperation as is customary and reasonably requested by Parent in connection with the arrangement, syndication and consummation of the debt financing, including using its reasonable best efforts to:

    furnish Parent and Merger Sub and their debt financing sources, as promptly as reasonably practicable, all required financial information (as described above in the section entitled "—Marketing Period");

    have the Company designate members of its senior management to execute customary authorization letters with respect to Company information included in a customary confidential information memorandum for a syndicated bank financing and cause management of the Company to participate in a reasonable number of meetings, presentations, road shows, sessions (upon reasonable request) with rating agencies, due diligence sessions, drafting sessions and sessions between senior management and the sources of the debt financing;

    provide reasonable and customary assistance with the preparation of materials for rating agency presentations, road shows, bank information memoranda, private placement memoranda and other customary marketing materials and provide reasonable cooperation with the due diligence efforts of the debt financing sources to the extent reasonable and customary;

    request the Company's independent auditors to cooperate with Parent to obtain an agreed upon form of comfort letter;

    to the extent timely requested by Parent and required under the debt commitment letter, (i) obtain documents reasonably requested by Parent or its debt financing sources relating to the repayment of the existing indebtedness of the Company and its subsidiaries and the release of related liens and related guarantees and (ii) provide all documentation and other information required by U.S. bank regulatory authorities under applicable "know-your-customer" and anti-money laundering rules and regulations relating to the Company or any of its subsidiaries, in each case as reasonably requested by Parent at least ten business days prior to the closing date;

    assist in the preparation, execution and delivery of definitive financing documents, including guarantee and collateral documents and customary closing certificates (including a solvency certificate from the chief financial officer or other officer of equivalent duties) as may be required by the debt financing and other customary documents as may be reasonably requested by Parent and cooperate to facilitate the pledging of, granting of security interests in and obtaining perfection of any liens on, collateral in connection with the debt financing, but in no event shall any of the foregoing be effective until as of or after the closing;

    cooperate with Parent and take all corporate actions or other similar actions reasonably necessary to permit the consummation of the financing, including customary resolutions, consents or approvals;

    assist Parent in obtaining legal opinions from local outside counsel as reasonably requested by Parent for financings similar to the financing;

    (i) subject to confidentiality restrictions, permit the prospective lenders involved in the financing to evaluate the Company and its subsidiaries' current assets, cash management and accounting systems, policies and procedures relating thereto for the purpose of establishing collateral arrangements, (ii) cooperate with Parent to establish bank and other accounts and blocked

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      account agreements and lock box arrangements in connection with the foregoing and (iii) permit representatives of the prospective lenders to conduct commercial field examinations, inventory and intellectual property appraisals, environmental assessments and an appraisal of the owned real property, and make audits and appraisals delivered for the purposes of any credit facility available to Parent for purposes of its financing;

    provide monthly financial statements (excluding footnotes) of the Company and its subsidiaries or business units to the extent the Company customarily prepares (and has prepared) such financial statements; and

    use commercially reasonable efforts to assist Parent in benefiting from the existing lending relationships of the Company and its subsidiaries.

        The requested cooperation described above must not, in the Company's reasonable judgment, unreasonably interfere with the ongoing business or operations of the Company and any of its subsidiaries. In no event will the Company or any of its subsidiaries be required to bear any cost or expense, pay any commitment or other fee, enter into any definitive agreement, incur any other liability or obligation, make any other payment or agree to provide any indemnity in connection with the financing or any of the foregoing prior to the effective time. In addition, none of the requested cooperation described above will require any action that would conflict with or violate the Company's or any of its subsidiaries' organizational documents or any laws or result in, prior to the effective time, the contravention of, or that would reasonably be expected to result in, prior to the effective time, a violation or breach of, or default under, any contract to which the Company or any of its subsidiaries is a party. In addition, if, in connection with a marketing effort contemplated by the debt commitment letter, Parent reasonably requests the Company to file a Current Report on Form 8-K pursuant to the Exchange Act that contains material non-public information with respect to the Company, which Parent reasonably desires to include in a customary offering memorandum for the debt financing, then the Company must discuss in good faith whether or not the Company will file a Current Report on Form 8-K or similar document containing such material non-public information.

        None of the Company or its subsidiaries or their respective officers, directors (with respect to any subsidiary of the Company) or employees will be required to execute or enter into or perform any agreement with respect to the financing contemplated by the financing letters that is not contingent upon the closing or that would be effective prior to the closing and no directors of the Company that will not be continuing directors, acting in such capacity, will be required to execute or enter into or perform any agreement, or to pass any resolutions or consents, with respect to the financing, except for any customary authorization letters. Parent must promptly, upon request by the Company, reimburse the Company for all reasonable out-of-pocket costs and expenses (including reasonable attorneys' fees and fees and expenses of the Company's accounting firms engaged to assist in connection with the financing) incurred by the Company or any of its subsidiaries or any of their respective representatives in connection with the financing, and must indemnify and hold harmless the Company, its subsidiaries and their respective representatives from and against any and all losses, damages, claims, costs or expenses suffered or incurred by any of them in connection with the arrangement of the financing and any information used in connection therewith.

        Parent must, and must cause its affiliates to, refrain from taking, directly or indirectly, any action that could reasonably be expected to result in the failure of any of the conditions contained in the financing letters or in any definitive agreement relating to the financing. Parent and Merger Sub have acknowledged and agreed under the merger agreement that, notwithstanding the Company's obligations under the merger agreement, none of the obtaining of the financing or any permitted alternative financing, the completion of any issuance of securities contemplated by the financing, or the Company or any of its subsidiaries having or maintaining any available cash balances is a condition to the closing, and have reaffirmed their obligation to consummate the transactions contemplated by the merger

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agreement irrespective and independently of the availability of the financing or any permitted alternative financing, the completion of any such issuance, or the Company or any of its subsidiaries having or maintaining any available cash balances.

Security Holder Litigation

        In the event that any litigation related to the merger agreement, the merger or the other transactions contemplated thereby is brought by any stockholder of the Company or any holder of the Company's other securities against the Company and/or its directors or officers, the Company must promptly notify Parent of such litigation and must keep Parent reasonably informed with respect to the status thereof. The Company will have the right to control the defense and settlement of any litigation related to the merger agreement, the merger or the other transactions contemplated by the merger agreement brought by any stockholder of the Company or any holder of the Company's other securities against the Company and/or its directors or officers. However, the Company will give Parent the opportunity to participate, at Parent's expense, in the defense of any such litigation and the Company must consider in good faith Parent's advice with respect to such litigation. The Company may not settle any such litigation without the prior written consent of Parent.

Proxy Statement; Company Stockholders' Meeting

        As promptly as reasonably practicable following the Company's receipt of notice from the SEC that the SEC has completed its review of this proxy statement (or, if the SEC does not inform the Company that it intends to review this proxy statement on or before the 10th calendar day following the filing of this proxy statement, as promptly as reasonably practicable following such 10th calendar day), the Company is obligated to call, give notice of, convene and hold a special meeting of its stockholders, which we refer to as the special meeting, to consider adoption of the merger agreement and the advisory vote required by Rule 14a-21(c) under the Exchange Act.

        However, the Board is permitted to adjourn, delay or postpone the special meeting in accordance with applicable law (but not beyond the outside date, which is described below)

    to the extent necessary to allow reasonable additional time for the filing and mailing of any supplemental or amended disclosure which the Board has determined in good faith after consultation with outside counsel is reasonably likely to be necessary or appropriate under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by the Company's stockholders prior to the special meeting;

    if there are insufficient shares of Company common stock represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of the special meeting; or

    on one occasion to allow reasonable additional time to solicit additional proxies to the extent the Board or any committee thereof reasonably believes necessary in order to obtain the Company stockholder approval.

        Except to the extent that the Board will have effected a board recommendation change in accordance with the merger agreement, the Board must (i) recommend to its stockholders that they adopt the merger agreement and (ii) include such recommendation in this proxy statement.

Carveout Transaction Matters

        If requested by Parent, at Parent's sole expense, the Company must:

    provide commercially reasonable cooperation to Parent and Merger Sub's review of and planning for an internal reorganization of the Company and its subsidiaries into separate internal

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      organizations for the United States retail, Canadian retail, and North American delivery businesses, which we refer to as the carveout transactions; and

    refrain from taking actions to effect any internal reorganization to implement the carveout transactions without the prior written consent of Parent.

        However, the Company is not required to take any corporate action, to execute any document or other instrument, or to incur any liability that is not conditioned upon or that would be effective prior to the effective time of the merger. The completion of the carveout transactions is not a condition to closing and the Company's compliance or failure to comply with its obligations to cooperate with the carveout transactions will not be taken into account for purposes of determining whether the closing condition regarding the Company's compliance with its covenants has been satisfied.

Repatriation

        The merger agreement provides that we and our wholly-owned subsidiaries will cooperate with Parent to effect the transfer of unrestricted cash balances held in commercial bank accounts in foreign jurisdictions to accounts located in the United States, in each case effective as of the effective time. Parent has agreed to indemnify and hold harmless the Company, its subsidiaries and its and their representatives from and against any and all liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments, taxes and penalties suffered or incurred by them in connection with any such repatriation. The repatriation of foreign cash is not a condition to closing and the Company's compliance or failure to comply with its obligations to cooperate with the repatriation of foreign cash will not be taken into account for purposes of determining whether the closing condition regarding the Company's compliance with its covenants has been satisfied.

Treatment of Certain Notes

        The Company has previously issued 2.750% Senior Notes Due 2018, which we refer to as the 2018 Notes, and 4.375% Senior Notes Due 2023, which we refer to as the 2023 Notes. We refer to the 2018 Notes and the 2023 Notes together as the Notes.

        The Company has agreed, at the request and expense of Parent, to promptly commence an offer to purchase for any and all of the outstanding aggregate principal amount of the Notes on price terms that are acceptable to Parent and such other customary terms and conditions as are reasonably acceptable to the Company and Parent to be consummated substantially simultaneously with the closing of the merger using funds provided by Parent, which we refer to as a Debt Tender Offer. Any Debt Tender Offer will be conditioned on the closing of the merger.

        If reasonably requested by Parent in writing, the Company will, in accordance with the applicable redemption provisions of the applicable series of Notes and the indenture governing such Notes, (i) substantially simultaneous with the effective time issue a notice of optional redemption for all of the outstanding aggregate principal amount of such series of Notes, pursuant to the redemption provisions of the applicable indenture and (ii) use reasonable best efforts to take any other actions reasonably requested by Parent to facilitate the satisfaction and discharge of such series of Notes pursuant to the satisfaction and discharge provisions of the applicable indenture and the other provisions of such indenture applicable thereto, in each case so long as Parent has or has caused to be set aside sufficient and immediately available funds to deliver to the Company to effect such redemption and satisfaction and discharge.

        Parent will (or the Company will, if directed by Parent), at a time selected by Parent at or after the closing of the merger, commence a change of control offer to purchase all of the 2023 Notes (in accordance with the requirements of the indenture governing such Notes) at the price required pursuant to the indenture governing such Notes using funds provided by Parent. In accordance with the

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terms of the change of control offer for the 2023 Notes, the surviving corporation will accept for purchase and purchase each of the 2023 Notes properly tendered and not properly withdrawn in such change of control offer using funds provided by Parent.

        The Company and its subsidiaries will comply with the requirements of Rule 14e-1 under the Exchange Act and any other applicable law to the extent such laws are applicable in connection with the any change of control offer or any Debt Tender Offer and such compliance will not be deemed a breach of the merger agreement.

        Parent will promptly, upon the Company's request, reimburse the Company for certain reasonable and documented out-of-pocket costs, fees and expenses incurred by or on behalf of the Company at the request of Parent in connection with its compliance with the obligations under the Notes, including reasonable and documented out-of-pocket costs, fees and expenses incurred by or on behalf of the Company in connection with any Debt Tender Offer, redemption, satisfaction, discharge or change of control offer made in respect of any series of Notes (including any out-of-pocket costs, fees and expenses incurred in connection with the preparation or distribution of any offer documents or other documents related thereto). Subject to certain exceptions, Parent will also indemnify and hold harmless the Company and its representatives for certain liabilities incurred by any of them in connection with any such action.

Conditions to the Merger

        The obligation of each of the Company, Parent and Merger Sub to consummate the merger is subject to the satisfaction or waiver of the following conditions:

    the obtaining of the Company stockholder approval;

    the waiting period (and any extension thereof) applicable to the consummation of the merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or early termination thereof having been granted; and

    no governmental entity of competent jurisdiction having enacted, issued, promulgated, enforced or entered any order, executive order, stay, decree, judgment or injunction (temporary, preliminary or permanent) or statute, rule or regulation which is in effect and which has the effect of making the merger illegal or otherwise prohibiting, restraining, preventing or enjoining consummation of the merger.

        The obligation of the Company to consummate the merger is subject to the satisfaction or waiver of the following additional conditions:

    the representations and warranties of Parent and Merger Sub that (i) are not made as of a specific date being true and correct as of the effective time, as though made as of the effective time, and (ii) are made as of a specific date being true and correct as of such date, in each case, except where the failure of such representations or warranties to be true and correct (without giving effect to any limitation as to materiality or Parent Material Adverse Effect set forth in such representations and warranties) is not reasonably likely to have a Parent Material Adverse Effect;

    each of Parent and Merger Sub having performed in all material respects all covenants and obligations required to be performed by it under the merger agreement at or prior to the effective time; and

    receipt of a certificate, dated as of the closing date, signed by an executive officer of Parent certifying as to the matters set forth in the immediately preceding two bullets.

        The obligation of Parent and Merger Sub to consummate the merger is subject to the satisfaction or waiver of the following additional conditions:

    the Company's representation regarding the absence of a Company Material Adverse Effect being true and correct in all respects as of the date of the merger agreement and as of the effective time, as though made as of the effective time;

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    certain representations and warranties of the Company regarding the Company's capitalization being true and correct in all respects as of the date of the merger agreement and the effective time, as though made as of the effective time (other than any such representation or warranty that is made as of a specific date, which need only be true and correct in all respects as of such date), except where the failure of such representations and warranties to be so true and correct would, individually or in the aggregate, be reasonably expected to result in more than $5,000,000 of aggregate merger consideration or amounts payable to holders of equity awards pursuant to the merger agreement;

    certain representations and warranties of the Company regarding organization, capitalization, authority, Section 203 of the DGCL and brokers being true and correct in all material respects (other than any such representation or warranty that is qualified by materiality or Company Material Adverse Effect, which must be true and correct in all respects) as of the effective time, as though made on and as of the date hereof and the effective time (other than any such representation or warranty that is made as of a specific date, which need only be true and correct in all material respects as of such date);

    all other representations and warranties of the Company contained in the merger agreement being true and correct as of the effective time, as though made as of the effective time (other than any such representation or warranty that is made as of a specific date, which need only be true and correct as of such date), except where the failure of such representations or warranties to be true and correct (without giving effect to any limitation as to materiality or Company Material Adverse Effect set forth in such representations and warranties) is not reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect;

    the Company shall have performed in all material respects all covenants and obligations required to be performed by it under the merger agreement prior to the effective time; and

    receipt of a certificate, dated as of the closing date, signed by an executive officer of the Company certifying as to the matters set forth in the immediately preceding five bullets.

Termination

        The merger agreement may be terminated and the merger may be abandoned:

    by mutual written consent of Parent and the Company at any time prior to the effective time;

    by either Parent or the Company, if the effective time of the merger has not occurred on or before December 22, 2017, which we refer to as the outside date, except that a party to the merger agreement will not be permitted to terminate the merger agreement under this provision if the failure of such party to fulfill, in any material respect, any obligation under the merger agreement has been a principal cause of or resulted in the failure of the effective time to occur on or before the outside date, provided that no party will be permitted to terminate the merger agreement during the three business day notice period referenced in the final bullet in this section entitled "—Termination;"

    by either Parent or the Company at any time prior to the effective time if a governmental entity of competent jurisdiction has issued a nonappealable final order, decree, judgment, injunction or ruling or taken any other nonappealable final action, in each case having the effect of permanently restraining, enjoining, preventing or otherwise prohibiting the consummation of the merger, except that a party to the merger agreement will not be permitted to terminate the merger agreement under this provision if the failure of such party to use the standard of efforts required pursuant to the merger agreement to prevent and oppose such order, decree, ruling or the taking of such other action has been a principal cause of or resulted in the issuance of any such order, decree, ruling or the taking of such other action;

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    by Parent or the Company if the Company stockholder approval is not obtained at the special meeting or at any adjournment or postponement thereof at which a vote on the adoption of the merger agreement was taken;

    by Parent, prior to the effective time, if the Board has effected a Company board recommendation change;

    by the Company, at any time prior to receipt of the Company stockholder approval, in order to enter into a definitive agreement providing for a superior proposal after complying with the terms and conditions of the provisions described above in the sections entitled "—Restrictions on Solicitation of Other Offers" and "—Restrictions on Changes of Recommendation to Company Stockholders" in all material respects; provided that any purported termination of the merger agreement under this provision will be null and void if the Company does not, prior to or concurrently with the termination of the merger agreement, pay Parent the Company termination fee;

    by Parent, prior to the effective time, if there has been a breach of, inaccuracy in or failure to perform any representation, warranty, covenant or agreement of the Company set forth in the merger agreement, which breach, inaccuracy or failure to perform (i) would cause certain closing conditions applicable to Parent and Merger Sub set forth in the merger agreement not to be satisfied, and (ii) is not capable of being cured by the outside date or, if capable of being cured by the outside date, will not have been cured within 20 business days following receipt by the Company of written notice of such breach, inaccuracy or failure to perform from Parent, provided that neither Parent nor Merger Sub is then in material breach of any representation, warranty or covenant under the merger agreement that would cause certain other closing conditions set forth in the merger agreement not to be satisfied;

    by the Company, prior to the effective time, if there has been a breach of, inaccuracy in or failure to perform any representation, warranty, covenant or agreement of Parent or Merger Sub set forth in the merger agreement, which breach, inaccuracy or failure to perform (i) would cause certain closing conditions applicable to the Company set forth in the merger agreement not to be satisfied, and (ii) is not capable of being cured by the outside date or, if capable of being cured by the outside date, will not have been cured within 20 business days following receipt by Parent of written notice of such breach, inaccuracy or failure to perform from the Company, provided that the Company is not then in material breach of any representation, warranty or covenant under the merger agreement that would cause certain other closing conditions set forth in the merger agreement not to be satisfied; or

    by the Company if:

    the marketing period has ended and the closing conditions applicable to Parent (other than those conditions that by their nature are to be satisfied by actions taken at the closing each of which is capable of being satisfied at the closing) have been and continue to be satisfied;

    the Company has confirmed by written notice to Parent after the end of the marketing period that all closing conditions applicable to the Company have been satisfied (other than those conditions that by their nature are to be satisfied by actions taken at the closing each of which is capable of being satisfied at the closing) or that it irrevocably waives in writing any unsatisfied conditions that may be waived under applicable law; and

    the merger will not have been consummated within three business days after the date on which Parent is required to consummate the merger pursuant to the merger agreement, and at all times during such three business day period, the Company stood ready, willing and able to consummate the merger.

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        In the event of valid termination of the merger agreement as provided above, written notice thereof will be given to the other party or parties to the merger agreement, specifying the provision pursuant to which such termination is made and the merger agreement will immediately become void and there shall be no liability or obligation on the part of Parent, the Company, Merger Sub or their respective representatives, stockholders or affiliates; except that, subject to certain limitations,

    any such termination will not relieve any party from liability for any willful breach prior to such valid termination; and

    certain provisions, including those related to confidentiality, fees and expenses, defined terms and miscellaneous matters and the confidentiality agreement between Parent and the Company and the limited guarantee, will remain in full force and effect and survive any valid termination of the merger agreement in accordance with their respective terms and conditions.

        A "willful breach" means a material breach of any covenant or agreement set forth in the merger agreement that is a consequence of an act, or failure to act, undertaken by the breaching party with the actual knowledge that the taking of such act, or failure to act, would result, or would reasonably be expected to result, in such breach.

Termination Fees

        Subject to certain limitations, the Company will pay Parent a termination fee equal to $171,000,000, which we refer to as the Company termination fee, in the event that the merger agreement is terminated:

    by Parent if the Board has effected a Company board recommendation change;

    by the Company in order to enter into a definitive agreement providing for a superior proposal; or

    (i) by Parent if there has been a breach of, inaccuracy in or failure to perform any representation, warranty, covenant or agreement of the Company set forth in the merger agreement, which breach, inaccuracy or failure to perform would cause certain closing conditions applicable to Parent and Merger Sub set forth in the merger agreement not to be satisfied, and is not capable of being cured by the outside date or, if capable of being cured by the outside date, will not have been cured within 20 business days following receipt by the Company of written notice of such breach, inaccuracy or failure to perform from Parent, (ii) by either Parent or the Company, prior to receipt of the Company stockholder approval, if the effective time of the merger has not occurred on or before the outside date or (iii) by Parent or the Company if the Company stockholder approval is not obtained, if (in each of the preceding clauses (i), (ii) and (iii)):

    before the date of such termination, an acquisition proposal has been publicly announced, made or disclosed and not irrevocably withdrawn without encouragement by or consultation with (excluding arms-length negotiations regarding the terms of the acquisition proposal) the Company or its representatives;

    at the time of the stockholder vote, the debt and equity commitment letters are in full force and effect or have been replaced by alternative financing commitments in corresponding amounts sufficient to consummate the merger; and

    within 12 months after the date of termination, the Company enters into a definitive agreement with respect to any acquisition proposal (which is subsequently consummated) or has consummated any acquisition proposal (provided that, for these purposes, the references to "20%" and "80%" in the definition of "acquisition proposal" are deemed to be references to "50%").

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        If either the Company or Parent terminates the merger agreement because the Company stockholder approval is not obtained and at the time of the stockholder vote, the debt and equity commitment letters are in full force and effect or have been replaced with letters providing for alternative financing commitments in a corresponding amount sufficient to consummate the merger, the Company will pay to Parent within two business days following the delivery by Parent of an invoice therefor any and all out-of-pocket fees and expenses actually incurred by Parent or on its behalf in connection with or related to the authorization, preparation, investigation, negotiation, execution and performance of the merger agreement and the transactions contemplated by the merger agreement, which we refer to as the Parent expenses, up to a maximum amount of $15,000,000. To the extent a Company termination fee becomes payable, any payment previously made pursuant to the preceding sentence will be credited against the obligation of the Company to pay the Company termination fee.

        Subject to certain limitations, Parent will pay the Company a termination fee equal to $343,000,000 in the event that the merger agreement is terminated:

    by the Company, prior to the effective time, if there has been a breach of, inaccuracy in or failure to perform any representation, warranty, covenant or agreement of Parent or Merger Sub set forth in the merger agreement, which breach, inaccuracy or failure to perform (i) would cause certain closing conditions applicable to the Company set forth in the merger agreement not to be satisfied, and (ii) is not capable of being cured by the outside date or, if capable of being cured by the outside date, will not have been cured within 20 business days following receipt by Parent of written notice of such breach, inaccuracy or failure to perform from the Company; or

    by the Company if:

    the marketing period has ended and the closing conditions applicable to Parent (other than those conditions that by their nature are to be satisfied by actions taken at the closing each of which is capable of being satisfied at the closing) have been and continue to be satisfied;

    the Company has confirmed by written notice to Parent after the end of the marketing period that all closing conditions applicable to the Company have been satisfied (other than those conditions that by their nature are to be satisfied by actions taken at the closing each of which is capable of being satisfied at the closing) or that it irrevocably waives in writing any unsatisfied conditions that may be waived under applicable law; and

    the merger has not been consummated within three business days after the date on which Parent is required to consummate the merger pursuant to the merger agreement, and at all times during such three business day period, the Company stood ready, willing and able to consummate the merger.

        In no event will the Company or Parent be required to pay a termination fee on more than one occasion.

        If the Company or Parent fails to timely pay any amount described above and, in order to obtain the payment, the other party commences a suit, action or proceeding which results in a final and non-appealable judgment against the other party for the applicable payment set forth above, such paying party will pay the other party its reasonable and documented out-of-pocket costs and expenses (including reasonable and documented out-of-pocket attorneys' fees) in connection with such suit, action or proceeding, together with interest on such amount at the prime rate as published in The Wall Street Journal in effect on the date such payment was required to be made through the date such payment was actually received.

        Payment of the Parent termination fee to the Company, together with any indemnification for or reimbursement of any applicable expenses pursuant to certain provisions of the merger agreement, will

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be the sole and exclusive remedy for any and all losses or damages suffered or incurred by the Company or any other person arising out of or in connection with the merger agreement, the financing letters or the limited guarantee, any of the transactions contemplated thereby (or the abandonment or termination thereof), any breach (including any willful breach) or failure to perform under the merger agreement, the failure of the merger or the other transactions to be consummated, or any matter forming the basis for such termination, and, upon payment of such amount, neither the Company, nor any other person will be entitled to bring or maintain any claim, action or proceeding against Parent, Merger Sub, any guarantor, the financing sources or any of their respective representatives or any of their respective affiliates or any of their or their affiliates' respective direct or indirect, former, current or future general or limited partners, stockholders, equityholders, securityholders, financing sources, managers, members, directors, officers, employees, controlling persons, agents or assignees, which we refer to collectively as the Parent related parties, for any loss or damage arising out of or in connection with any breach (including any willful breach) or failure to perform under the merger agreement, the financing letters or the limited guarantee, any of the transactions (or the abandonment or termination thereof), the failure of the merger or the other transactions to be consummated or any matters forming the basis for such termination.

        Payment of the Company termination fee to Parent shall, together with any reimbursement of applicable expenses, be the sole and exclusive remedy for any and all losses or damages suffered or incurred by Parent, Merger Sub, the Parent related parties or any other person arising out of or in connection with the merger agreement, the transactions (and the abandonment or termination thereof), any breach (including any willful breach) or failure to perform under the merger agreement, the failure of the merger or the other transactions to be consummated, or any matter forming the basis for such termination, and, upon payment of such amount, none of Parent, Merger Sub, any of their respective affiliates or any other person will be entitled to bring or maintain any claim, action or proceeding against the Company and its subsidiaries and any of their respective direct or indirect, former, current or future officers, directors, partners, stockholders, managers, members, financing sources, representatives, employees, controlling persons, agents, affiliates or any other person claiming by, through or for the benefit of the Company, which we refer to collectively as the Company related parties, arising out of or in connection with the merger agreement (including any willful breach), any of the transactions, the failure of the merger or the other transactions to be consummated or any matters forming the basis for such termination.

Amendment; Extension; Waiver; Procedures

Amendment

        The merger agreement may be amended, modified or supplemented by the parties to the merger agreement by action taken or authorized by their respective boards of directors at any time prior to the effective time of the merger, whether before or after receipt of the Company stockholder approval, except that after receipt of the Company stockholder approval, no amendment may be made that pursuant to applicable law requires further approval or adoption by the stockholders of the Company without such further approval or adoption. The merger agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment, modification or supplement to the merger agreement (as applicable), signed on behalf of each of the parties to the merger agreement.

Extension; Waiver

        At any time prior to the effective time of the merger, the parties to the merger agreement, by action taken or authorized by their respective boards of directors, may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other parties to the merger agreement, (ii) waive any inaccuracies in the representations and warranties contained in

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the merger agreement or in any document delivered pursuant the merger agreement and (iii) waive compliance with any of the agreements or conditions contained in the merger agreement. Any agreement on the part of a party to the merger agreement to any such extension or waiver will be valid only if set forth in a written instrument signed on behalf of such party. Such extension or waiver will not apply to any time for performance, inaccuracy in any representation or warranty, or noncompliance with any agreement or condition, as the case may be, other than that which is specified in the extension or waiver. The failure of any party to the merger agreement to assert any of its rights under the merger agreement or otherwise will not constitute a waiver of such rights.

Procedure for Termination, Amendment, Extension or Waiver

        A termination, amendment, modification, supplement, extension or waiver of the merger agreement will, in order to be effective, require action by the respective board of directors of the applicable parties.

Remedies

        Under the merger agreement, the parties thereto have acknowledged and agreed that the parties will be entitled to an injunction or injunctions, specific performance or other equitable relief to prevent breaches of the merger agreement and to enforce specifically the terms and provisions of the merger agreement. The right of the Company to obtain an injunction, specific performance or other equitable remedies in connection with enforcing Parent's obligation to cause the equity financing to be funded in accordance with the terms and conditions of the applicable equity commitment letter and to effect the closing is subject in all events to the requirements that:

    the marketing period has ended and the satisfaction, or express written waiver by Parent of all conditions precedent to the obligations of Parent to consummate the transactions contemplated by the merger agreement (other than those conditions that by their nature are to be satisfied at the closing, but subject to such conditions being satisfied at the closing) at the time when the closing would have been required to occur pursuant to the merger agreement, but for the failure of the equity financing to be funded;

    the debt financing has been funded or will be funded in accordance with the terms thereof at the closing if the equity financing is or were to be funded at the closing; and

    the Company has irrevocably confirmed in writing to Parent that if specific performance is granted and the equity financing and debt financing were funded, then it would take such actions required of it by the merger agreement to cause the closing to occur and it stands ready, willing and able to consummate the merger.

        In connection with any loss suffered by the Company or any Company related party arising out of or in connection with the merger agreement, the financing letters or the limited guarantees and the transactions contemplated by the merger agreement, including as a result of the failure of the transactions contemplated thereby to be consummated or for a breach (including willful breach) or failure to perform thereunder or otherwise (other than in the circumstances in which the Company is entitled to receive the Parent termination fee), the maximum aggregate monetary liability of Parent and the Parent related parties is limited to the amount of the Parent termination fee, and in no event may the Company seek or be entitled to recover from Parent or any Parent related party any monetary damages in excess of such amount, except with respect to indemnification for or reimbursement of any applicable expenses pursuant to certain provisions of the merger agreement.

        In connection with any loss suffered by Parent, Merger Sub, any guarantor, the financing sources or any of their respective representatives or any of their respective affiliates as a result of the failure of the transactions contemplated by the merger agreement to be consummated or for a breach or failure

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to perform thereunder or otherwise, other than in the circumstances in which Parent is entitled to receive the Company termination fee, the maximum aggregate monetary liability of the Company and the Company related parties is limited to the amount of the Company termination fee, and in no event may Parent seek or be entitled to recover from the Company or any Company related party any monetary damages in excess of such amount.

Governing Law; Submission to Jurisdiction

        The merger agreement is governed by the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of laws of any jurisdictions other than those of the State of Delaware. Except as specifically set forth in the debt commitment letters, all claims or causes of action (whether at law, in equity, in contract, in tort or otherwise) against any of the debt financing sources in any way relating to the debt commitment letters or the performance thereof or the financings contemplated thereby, shall be exclusively governed by and construed in accordance with, the internal laws of the State of New York. Each of the parties to the merger agreement consented to submit itself to the exclusive personal jurisdiction of the Delaware Court of Chancery or, if that court does not have jurisdiction, a federal court sitting in the State of Delaware in any action or proceeding arising out of or relating to the merger agreement or any of the transactions contemplated by the merger agreement.

Required Vote; Recommendation of the Board

        The vote on this proposal to adopt the merger agreement is a vote separate and apart from the vote on the nonbinding advisory proposal regarding "golden parachute" compensation and the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement. Accordingly, you may vote "FOR" either or both of the nonbinding advisory proposal regarding "golden parachute" compensation and the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement and vote "AGAINST" or "ABSTAIN" for this proposal to adopt the merger agreement.

        The approval of this proposal requires the affirmative vote of a majority of the outstanding shares of Company common stock entitled to vote thereon as of the record date.

        The Board recommends that you vote "FOR" approval of the proposal to adopt of the merger agreement.

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AMENDMENT TO COMPANY BY-LAWS

        On June 28, 2017, the Board adopted an amendment, which we refer to as the by-law amendment, to our by-laws. The by-law amendment, which was effective upon adoption by the Board, designates the Delaware Court of Chancery as the sole and exclusive forum for any stockholder to bring (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of the Company to the Company or the Company's stockholders, including, without limitation, a claim alleging the aiding and abetting of such a breach of fiduciary duty, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our certificate of incorporation or our by-laws (as each may be amended from time to time) or as to which the DGCL confers jurisdiction on the Delaware Court of Chancery, or (iv) any action asserting a claim governed by the internal affairs doctrine.

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NONBINDING ADVISORY PROPOSAL REGARDING "GOLDEN PARACHUTE" COMPENSATION (PROPOSAL TWO)

        In accordance with Section 14A of the Exchange Act and Rule 14a-21(c) under the Exchange Act, we are providing stockholders with the opportunity to cast a nonbinding advisory vote with respect to certain payments that may be made to our named executive officers in connection with the merger, or "golden parachute" compensation, as reported on the Golden Parachute Compensation table on page [—].

        Accordingly we are seeking approval of the following resolution at the special meeting:

      "RESOLVED, that the compensation that may be paid or become payable to the Company's named executive officers in connection with the merger, as disclosed in the table in the section of the proxy statement entitled 'The Merger—Interests of Certain Persons in the Merger—Golden Parachute Compensation' including the associated narrative discussion, is hereby approved."

        The vote on this proposal is a vote separate and apart from the vote on the proposal to adopt the merger agreement and the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement. Accordingly, you may vote "FOR" either or both of the proposal to adopt the merger agreement and the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement and vote "AGAINST" or "ABSTAIN" for this nonbinding advisory proposal regarding "golden parachute" compensation (and vice versa).

        Because your vote is advisory, it will not be binding upon the Company, the Board, the Board's compensation committee, Parent or any affiliate of Parent. Further, the underlying plans and arrangements are contractual in nature and not, by their terms, subject to stockholder approval. Accordingly, regardless of the outcome of the advisory vote, if the merger agreement is adopted by the stockholders and the merger is completed, the "golden parachute" compensation will still be paid to our named executive officers to the extent payable in accordance with the terms of such compensation.

        The approval of this proposal requires the affirmative vote of a majority of the votes cast by the holders of all of the shares present or represented at the special meeting and voting on such proposal.

        The Board recommends that you vote "FOR" approval of the nonbinding advisory proposal regarding "golden parachute" compensation.

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AUTHORITY TO ADJOURN THE SPECIAL MEETING (PROPOSAL THREE)

        We will ask our stockholders to vote only on this Proposal Three and not on the proposal to adopt the merger agreement or the nonbinding advisory proposal regarding "golden parachute" compensation, if the Board determines to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

        In this proposal, we are asking our stockholders to approve a proposal to authorize the Board, in its discretion, to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement. If our stockholders approve the adjournment of the special meeting, we could adjourn the special meeting and any adjourned session of the special meeting and use the additional time to solicit additional proxies, including the solicitation of proxies from stockholders that have previously returned properly executed proxies voting against adoption of the merger agreement.

        The vote on this proposal is a vote separate and apart from the vote on the proposal to adopt the merger agreement and the nonbinding advisory proposal regarding "golden parachute" compensation. Accordingly, you may vote "FOR" either or both of the proposal to adopt the merger agreement and the nonbinding advisory proposal regarding "golden parachute" compensation and vote "AGAINST" or "ABSTAIN" for the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement (and vice versa).

        The approval of this proposal requires the affirmative vote of a majority of the votes cast by the holders of all of the shares present or represented at the special meeting and voting on such proposal.

        The Board recommends that you vote "FOR" approval of the proposal to approve one or more adjournments of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the merger agreement.

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MARKET PRICE OF COMPANY COMMON STOCK

        The Company common stock is listed for trading on the Nasdaq Stock Market under the trading symbol "SPLS." The following table sets forth the high and low sales prices of the Company common stock, as reported by the Nasdaq Stock Market, for each quarterly period indicated.

 
  High   Low  

Fiscal 2017

             

First Quarter

  $ 10.18   $ 8.30  

Second Quarter (through July 17, 2017)

    10.25     8.55  

Fiscal 2016

   
 
   
 
 

First Quarter

  $ 11.37   $ 8.04  

Second Quarter

    10.83     8.00  

Third Quarter

    9.38     7.24  

Fourth Quarter

    10.11     7.24  

Fiscal 2015

   
 
   
 
 

First Quarter

  $ 19.40   $ 15.72  

Second Quarter

    16.84     13.74  

Third Quarter

    14.71     11.61  

Fourth Quarter

    13.50     8.29  

        The 10-day volume weighted average price per share of the Company's common stock for the period ended April 3, 2017, the last full trading day before widespread media speculation about a potential acquisition of the Company, is $8.58. On July 17, 2017, the closing price for Company common stock on the Nasdaq Stock Market was $10.11 per share of Company common stock. You are encouraged to obtain current market quotations for Company common stock in connection with voting your shares of Company common stock.

        The Company has historically paid regular quarterly cash dividends on its common stock. The Company most recently paid a cash dividend on July 13, 2017 of $0.12 per share. In connection with the transactions contemplated by the merger agreement, the Company has agreed to suspend the payment of its regular quarterly dividend following payment of the July 13 dividend.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth the beneficial ownership of our common stock held as of July 17, 2017 by (1) each person beneficially owning more than 5% of the outstanding shares of our common stock, (2) each director of the Company; (3) each of our named executive officers; and (4) all current directors and executive officers as a group based on the number of shares of our common stock outstanding as of July 17, 2017.

Name of beneficial owner
  Shares directly
or indirectly
owned(1)
  Shares
acquirable
within
60 days(2)
  Total
shares
beneficially
owned(3)
  Percentage of
common stock
beneficially
owned(4)
 

5% Shareholders

                         

Vanguard Group(5)

                         

100 Vanguard Blvd, Malvern, PA 19355

    65,277,605         65,277,605     9.94 %

BlackRock, Inc.(6)

                         

55 East 52nd Street, New York, NY 10055

    46,408,127         46,408,127     7.07 %

Directors and Named Executive Officers

                         

Mark Conte

    18,627     1,797     20,424     *  

Joseph Doody

    471,950     1,082,401     1,554,351     *  

Drew Faust(7)

    78,730         78,730     *  

Curtis Feeny(8)

    23,794         23,794     *  

Paul-Henri Ferrand

    30,822         30,822     *  

Shira Goodman(9)

    282,155     665,878     948,033     *  

Deborah Henretta

    20,115         20,115     *  

Kunal Kamlani

    31,033         31,033     *  

Christine Komola(10)

    221,995     177,789     399,784     *  

John Lundgren

    20,115         20,115     *  

Ronald Sargent(11)

    2,152,217     3,586,019     5,738,236     *  

Robert Sulentic(12)

    152,990     82,367     235,357     *  

Vijay Vishwanath

    113,836     59,867     173,703     *  

Paul Walsh(13)

    242,783     59,867     302,650     *  

Michael Williams

    28,314           28,314     *  

John Wilson(14)