| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
Chief Executive Officer and President Transition
On July 31, 2021, the Board of Directors (the “Board”) of Conn’s, Inc. (the “Company”) appointed Chandra Holt as the Company’s Chief Executive Officer and President, effective August 9, 2021 (the “Effective Date”). Ms. Holt will also join the Board as a director on the Effective Date. Ms. Holt will succeed Norman L. Miller, who will step down as Chief Executive Officer and President of the Company as of the Effective Date and will continue as Executive Chairman of the Board.
Chandra Holt, 41, will join the Company from Walmart Inc., where she served as Executive Vice President, CMO and CIO, Walmart.com since January 2020. From August 2018 to January 2020, Ms. Holt served as Senior Vice President, COO Samsclub.com. Ms. Holt also served as Senior Vice President, GMM - Grocery of Sam’s Club from May 2017 to August 2018 and as Vice President, Proprietary Brands of Sam’s Club from August 2015 to May 2017. Previously, Ms. Holt held multiple positions with Walgreens (Nasdaq: WBA) and Target (NYSE: TGT). Ms. Holt holds an M.B.A. from Carlson School of Management at the University of Minnesota and a Bachelor of Arts from the University of Minnesota.
There is no arrangement or understanding with any person pursuant to which Ms. Holt was appointed as President and Chief Executive Officer and a Director. There are no family relationships between Ms. Holt and any director or Chief Executive Officer and President of the Company, and Ms. Holt is not a party to any transaction requiring disclosure under Item 404(a) of Regulation S-K.
Ms. Holt’s Offer Letter and Severance Agreement
In connection with her appointment as Chief Executive Officer and President of the Company, Ms. Holt entered into an offer letter (the “Offer Letter”) and Executive Severance Agreement (the “Severance Agreement”) with the Company setting forth the terms of her employment and compensation. Pursuant to the Offer Letter, Ms. Holt will be entitled to an initial annualized base salary of $1.0 million and will be eligible for an annual bonus with a target payout of 150% of base salary and maximum annual bonus of 200% of her target bonus. Ms. Holt will also be eligible for long-term incentives under the terms and conditions of the Company’s annual long-term incentive program in the form of restricted stock units and performance based restricted stock units with a combined target grant date value of not less than $3.0 million. In addition, Ms. Holt will receive a one-time inducement grant of: (i) restricted stock units with a grant date fair value of $4.0 million, which will vest in three equal installments on the first, second and third anniversaries of her employment commencement date, subject to continued employment; and (ii) performance based restricted stock units with a grant date fair value of $2.0 million, which will vest, if at all, at the end of a three-year performance period measured from her employment commencement date. Ms. Holt will also be entitled to certain relocation benefits and certain professional fees in connection with entry into the Offer Letter and Severance Agreement.
In addition, pursuant to the Severance Agreement, if Ms. Holt is terminated by the Company for any reason, the Company will pay the following: (1) the earned but unpaid base salary to which she is entitled immediately prior to such termination; (2) any annual incentive plan bonus that relates to a completed performance period, but not yet paid on or prior to such termination; (3) accrued but unpaid vacation and unused sick days; and (4) reimbursement of any unpaid business expenses. Should Ms. Holt be terminated by the Company other than for Cause (as defined in the Severance Agreement) or as a result of her death or disability, or should Ms. Holt resign for Good Reason (as defined in the Severance Agreement), Ms. Holt will be entitled to certain severance benefits: (1) 24 months of Ms. Holt’s base salary; (2) Ms. Holt’s prorated annual cash bonus for the year of termination based on actual achievement of performance targets; (3) 24 months of the monthly premium necessary to continue Ms. Holt’s existing group medical, dental, life, disability and other employee welfare benefit plans; and (4) all awards held by Ms. Holt under the Company’s long-term incentive plan will continue to vest as if Ms. Holt had remained an employee of the Company for the 24 month severance period. Furthermore, should Ms. Holt be terminated during the 12-month period prior to a change of control or the 12-month period following a Change in Control, Ms. Holt would be entitled to: (1) a lump-sum cash payment in an amount equal to three times Ms. Holt’s base salary; (2) Ms. Holt’s prorated target annual cash bonus for the year of termination; (3) a lump sum cash stipend equal to 24 times the employer portion of the monthly premium payable for health and dental coverage had Ms. Holt continued to be actively employed by the Company; and (4) immediate vesting of all awards held by Ms. Holt under the Company’s long-term incentive program based on the greater of the target number of shares and the number of shares that would vest based on actual Company performance, and continued exercisability of such awards during the 24 month period following the date of termination.
The Company will enter into, as of the Effective Date, an indemnification agreement with Ms. Holt in the form previously filed as Exhibit 10.16 to the Company’s Registration Statement on Form S-1 on September 23, 2003, which is incorporated by reference herein.
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