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CEO Search and Transition Costs
12 Months Ended
Feb. 02, 2019
Related Party Transactions [Abstract]  
CEO Search and Transition Costs

L. CEO SEARCH AND TRANSITION COSTS

 

In March 2018, the Company announced that David Levin, its President and Chief Executive Officer would retire at the end of fiscal 2018.  The Company and Mr. Levin entered into a Transition Agreement dated March 20, 2018, as amended (the “Transition Agreement”) addressing Mr. Levin’s future retirement and related successor issues.  Pursuant to the terms of the Transition Agreement, Mr. Levin resigned as an officer and director of the Company on January 1, 2019.  Under that Transition Agreement, he is entitled to receive his base salary, AIP bonus and LTIP compensation through December 31, 2019.  On November 27, 2018, the Company entered into a letter agreement with Mr. Levin (the “Letter Agreement”).  The Letter Agreement is a supplement to the Transition Agreement, and it set forth Mr. Levin’s initial transition duties and consulting activities that he was required to perform under the terms of the Transition Agreement in the event that the Company had not appointed a successor CEO by December 31, 2018.

In accordance with the terms of the Letter Agreement because no successor CEO had been appointed by December 31, 2018, since January 1, 2019, Mr. Levin is the Company’s acting CEO and, as such, its principal executive officer (collectively, “Acting CEO”).  Pursuant to the terms of the Letter Agreement, Mr. Levin will receive total compensation of $800,000 for the period January 1, 2019 through April 1, 2019.

Subsequent to the end of fiscal 2018, on February 19, 2019, the Company appointed Harvey S. Kanter as its next President, Chief Executive Officer and a director of the Company effective April 1, 2019.  During a short transition period from February 19, 2019 until April 1, 2019, Mr. Kanter will serve as an Advisor to the Acting CEO, at which time Mr. Levin will resign as Acting CEO and Mr. Kanter will assume the role of President and Chief Executive Officer.  

In connection with the CEO transition and search costs, the Company incurred a total charge of approximately $2.4 million in fiscal 2018.  The $2.4 million charge related to amounts payable to Mr. Levin under his Transition Agreement, CEO search costs and the acceleration of stock-based compensation of approximately $0.5 million, related to his time-based equity awards.

The Company expects to incur additional charges in fiscal 2019 of approximately $0.5 million for CEO search, legal and housing allowance costs and approximately $1.2 million, assuming target, of future cash payments that Mr. Levin may be entitled to under existing performance plans, if and when such targets are achieved.