Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b)
Michael
Hartshorn will cease to serve in the position of Group Executive Vice President and Chief Financial Officer (and as principal
financial officer and principal accounting officer), effective as of August 16, 2019, concurrently with his promotion to Group President and Chief Operating Officer and with the appointment of Travis Marquette as Chief Financial
Officer.
(c) Appointment of Officers.
Effective August 16, 2019, the Board of Directors of Ross Stores, Inc. (the “Company”) has appointed:
|
(i)
|
Michael Hartshorn as Group President and Chief Operating Officer (principal operating officer).
|
|
(ii)
|
Michael Kobayashi as President, Operations & Technology.
|
|
(iii)
|
Travis Marquette as Group Senior Vice President and Chief Financial Officer (principal financial officer; principal accounting officer).
|
Mr. Hartshorn is 51, Mr. Kobayashi is 55, and Mr. Marquette is 48. Biographical information is incorporated by reference to the respective paragraphs regarding each of them under the caption “Biographies” in the press release attached as Exhibit 99.1.
Mr. Hartshorn will continue to report to Barbara Rentler, the Company’s CEO. Messrs. Kobayashi and Marquette will report to Mr. Hartshorn.
In connection with their promotions, Messrs. Hartshorn, Kobayashi, and Marquette have each entered into a new employment agreement with the Company that provides for each of them to serve an initial term through March 31, 2024 (subject to renewal by mutual agreement). Mr. Hartshorn is to receive a base salary of $1,100,000 per year. He will also receive a Restricted Stock Award, as of the effective date of his promotion and based on the closing price of the Company’s common stock on that day, with a notional value of $3,000,000 (vesting
16⅔
% on September 16, 2022, 25% on September 15, 2023, and the balance on September 13, 2024). Mr. Kobayashi is to receive a base salary of $1,000,000 per year. He will also receive a Restricted Stock Award, as of the effective date of his promotion and based on the closing price of the Company’s common stock on that day, with a notional value of $1,500,000 (vesting 40% on September 16, 2022 and 60% on September 15, 2023). Mr. Marquette is to receive a base salary of $675,000 per year. He will also receive a Restricted Stock Award, as of the effective date of his promotion and based on the closing price of the Company’s common stock on that day, with a notional value of $1,200,000 (vesting 50% on September 17, 2021 and 50% on September 16, 2022).
The new employment agreements for each of Messrs. Hartshorn, Kobayashi, and Marquette, like the prior agreements each of them had with the Company, also include provisions regarding an annual cash incentive bonus with a target based on a percentage of salary, severance benefits (including in the event of termination in conjunction with a change of control), reimbursement of certain estate planning costs, participation in benefit plans, and paid vacation days, on substantially similar terms to those the Company provides to its other senior executive officers, as described in the Company’s Proxy Statement filed with the Securities Exchange Commission on April 9, 2019. Each employment agreement also includes provisions regarding non-solicitation of Company employees and business counterparties for 24 months following termination, non-disparagement, protection of Company confidential information, potential recoupment by the Company of performance-based compensation received if financial results are subsequently restated, and arbitration of disputes.