Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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On April 21, 2017, Robert A. Riecker was appointed Chief Financial Officer of Sears Holdings Corporation (the Company), effective immediately.
Mr. Riecker succeeds Jason M. Hollar, who notified the Company on April 17, 2017 that he was resigning from his position as Chief Financial Officer of the Company to pursue another career opportunity. Mr. Hollar has advised the
Company that his decision to resign is not due to any disagreement with the Company on any matter relating to the Companys operations, policies or practices.
Mr. Riecker, age 52, has served as Controller and Head of Capital Markets Activities since October 2016. He joined the Company as Assistant Controller in
October 2005 and served as Vice President and Assistant Controller from May 2007 to October 2011. From October 2011 until his election as Vice President, Controller and Chief Accounting Officer in January 2012, he served as the Companys Vice
President, Internal Audit.
In connection with Mr. Rieckers appointment to the position of Chief Financial Officer, Mr. Riecker entered
into a letter agreement with the Company (the Letter Agreement). The Letter Agreement amends prior letter agreements entered into between Mr. Riecker and the Company dated as of September 28, 2011, January 29, 2014, August 15,
2016 and October 5, 2016, respectively, and provides for the following: (a) Mr. Rieckers annual base salary was increased to $650,000, effective April 21, 2017, and (b) his annual incentive bonus target increased to
100% of his base salary (or $650,000), and based on his existing agreements with the Company, his annual incentive bonus for 2017 and 2018 shall be no less than $262,500. For the 2017-2019 long-term compensation opportunities under the Sears
Holdings Corporation Long-Term Incentive Program (the LTIP) and the Sears Holdings Corporation Cash Long-Term Incentive Plan (the Cash LTI), Mr. Rieckers target incentive opportunity will be 100% of his base salary
(or $650,000), of which 75% is under the LTIP and 25% is under the Cash LTI. Pursuant to Mr. Rieckers letter agreement with the Company dated January 29, 2014, Mr. Riecker remains eligible to receive a $50,000 project bonus upon
the completion or conclusion of a spin-off of one of the Companys business units. Additionally, under an existing special retention award agreement entered into between Mr. Riecker and the Company on August 27, 2015, Mr. Riecker
remains eligible to receive a $212,500 retention bonus in August 2017, subject to the terms and conditions of the agreement. There were no changes to the existing executive severance agreement between Mr. Riecker and the Company, dated
October 1, 2011, as previously amended by the letter agreement dated October 5, 2016, which agreement is consistent with the Companys standard form of executive severance agreement for other senior executives.
There are no family relationships, as defined in Item 401 of Regulation
S-K,
between Mr. Riecker and any of the
Companys executive officers or any of the Companys directors. There is no arrangement or understanding between Mr. Riecker and any other person pursuant to which Mr. Riecker was appointed to his position. There are no
transactions in which Mr. Riecker has an interest requiring disclosure under Item 404(a) of Regulation
S-K.
Additionally, as part of the Companys previously announced initiatives to simplify its organizational structure, effective as of May 15, 2017,
Girish Lakshman will depart from his position as President, Fulfillment Supply Chain and Sourcing of the Company. Mr. Lakshman is entitled to certain benefits and is subject to certain restrictions under the terms of his existing
agreements with the Company, as further described in the Companys definitive proxy statement on Schedule 14A, filed with the Securities and Exchange Commission on March 31, 2017.