Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of President and Chief Executive Officer
On June 9, 2021, the GameStop Corp. (the "Company") announced the appointment of
Matthew Furlong, age 42, as the Company's President and Chief Executive Officer,
effective on or about June 21, 2021. Prior to joining the Company, Mr. Furlong
served as Country Leader, Australia for Amazon.com, Inc. ("Amazon") since
September 2019 and in various other roles at Amazon since October 2012,
including as Director, Technical Advisor, Amazon North America. Prior to joining
Amazon, Mr. Furlong served in various roles at The Procter & Gamble Company
focused on brand, marketing and sales strategies.
In connection with his appointment as the Company's President and Chief
Executive Officer, the Company entered into a letter agreement with Mr. Furlong
on June 9, 2021 describing the basic terms of his employment (the "Furlong
Letter Agreement"). The Furlong Letter Agreement provides that Mr. Furlong's
starting annualized base salary will be $200,000 and that he will also be
eligible to earn a total of $4,700,000 in sign-on bonuses, paid in 24 monthly
installments, subject to his continuous employment with the Company through the
payment date of the applicable installment unless he is terminated by the
Company without Cause (as defined in the Furlong Letter Agreement). In each of
the first 12 months of his employment with the Company, Mr. Furlong will receive
a sign-on bonus installment of $229,167. In each of months 13 through 24 of his
employment with the Company, Mr. Furlong will receive a sign-on bonus
installment of $162,500. Mr. Furlong is also entitled to a relocation bonus in
the amount of $250,000 to assist with the costs of his relocation to the
Dallas/Fort Worth area. The Furlong Letter Agreement also provides that, on the
first business day of the first calendar quarter that commences after the
effective date of his employment, Mr. Furlong will be entitled to a grant of a
number of restricted stock units or restricted shares of the Company's Class A
common stock determined by dividing $16,500,000 by the average closing price of
the Company's Class A common stock for the 30 trading days immediately preceding
the grant date (the "Initial Equity Award"). This equity award will vest as
follows: 5% on the first anniversary of the grant date, 15% on the second
anniversary of the grant date, and 20% on each of the dates that are 30, 36, 42
and 48 months following the grant date, subject in each case to his continuous
service to the Company through the applicable vesting date. Finally, the Furlong
Letter Agreement provides that Mr. Furlong's employment is conditioned on his
execution of a non-competition, non-solicitation and confidentiality agreement.
Under the Furlong Letter Agreement, if Mr. Furlong's employment is terminated by
the Company without Cause (as defined in the Furlong Letter Agreement), he will
be entitled to receive the following severance benefits: (i) an amount equal to
six months of his base salary, (ii) an amount equal to six months of COBRA
premiums for Mr. Furlong and his eligible dependents, (iii) any sign-on bonus
installments which then remain unpaid and (iv) the vesting of that portion of
the Initial Equity Grant, if any, that was otherwise scheduled to vest in the
ordinary course during the six month period immediately following his
termination date. Mr. Furlong's eligibility for these severance benefits is
subject to his execution of a release of claims against the Company and his
compliance with any applicable post-employment covenants.
The foregoing description of the Furlong Letter Agreement is not complete and is
qualified in its entirety by the full text of the Furlong Letter Agreement, a
copy of which is filed herewith as Exhibit 10.1 and incorporated herein by
reference.
There are no other arrangements or understandings between Mr. Furlong and any
other persons pursuant to which Mr. Furlong was named President and Chief
Executive Officer. Mr. Furlong does not have any family relationship with any of
the Company's directors or executive officers or any persons nominated or chosen
by the Company to be a director or executive officer. Mr. Furlong does not have
any direct or indirect interest in any transaction or proposed transaction
required to be reported under Item 404(a) of Regulation S-K.
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As previously disclosed, on April 18, 2021, the Company and George E. Sherman,
the Company's Chief Executive Officer, entered into a Transition and Separation
Agreement (the "Transition Agreement"), which provided for Mr. Sherman to step
down as the Company's President and Chief Executive Officer on the earliest of
(i) July 31, 2021, (ii) the effective date of the Company's appointment of a new
Chief Executive Officer, or (iii) the date his employment with the Company
ceases due to his death, disability or termination by the Company without cause.
Accordingly, upon the effective date of Mr. Furlong's employment with the
Company, Mr. Sherman will step down as the Company's President and Chief
Executive Officer and, subject to his execution of a release and his compliance
with post-employment covenants, will become entitled to the accelerated equity
vesting described in the Transition Agreement. Mr. Sherman has agreed to
continue to serve as a director of the Company, and he was reelected to the
Board of Directors at the Company's 2021 annual meeting of stockholders.
Appointment of Chief Financial Officer
On June 9, 2021, the Company announced the appointment of Mike Recupero, age 47,
as the Company's Chief Financial Officer, effective on or about July 12, 2021.
Prior to joining the Company, Mr. Recupero served as Chief Financial Officer of
the North American Consumer business of Amazon since January 2021 after serving
as Chief Financial Officer of the Prime Video business of Amazon since April
2019 and previously serving as Chief Financial Officer of the European Consumer
business of Amazon since October 2016. Prior to these roles, Mr. Recupero served
in various other roles at Amazon focused on finance since joining Amazon in
April 2004.
In connection with his appointment as the Company's Chief Financial Officer, the
Company entered into a letter agreement with Mr. Recupero on June 9, 2021
describing the basic terms of his employment (the "Recupero Letter Agreement").
The Recupero Letter Agreement provides that Mr. Recupero's starting annualized
base salary will be $200,000 and that he will also be eligible to earn a total
of $3,600,000 in sign-on bonuses, paid in 48 monthly installments, subject to
his continuous employment with the Company through the payment date of the
applicable installment unless he is terminated by the Company without Cause (as
defined in the Recupero Letter Agreement). In each of the first 12 months of his
employment with the Company, Mr. Recupero will receive a sign-on bonus
installment of $187,500. In each of months 13 through 24 of his employment with
the Company, Mr. Recupero will receive a sign-on bonus installment of
$95,833.33. In each of months 25 through 48 of his employment with the Company,
Mr. Recupero will receive a sign-on bonus installment of $8,333.33. The Recupero
Letter Agreement also provides that, on the first business day of the first
calendar quarter that commences after the effective date of his employment,
Mr. Recupero will be entitled to a grant of a number of restricted stock units
or restricted shares of the Company's Class A common stock determined by
dividing $10,800,000 by the average closing price of the Company's Class A
common stock for the 30 trading days immediately preceding the grant date (the
"Initial Equity Award"). This equity award will vest as follows: 5% on the first
anniversary of the grant date, 15% on the second anniversary of the grant date,
and 20% on each of the dates that are 30, 36, 42 and 48 months following the
grant date, subject in each case to his continuous service to the Company
through the applicable vesting date. Finally, the Recupero Letter Agreement
provides that Mr. Recupero's employment is conditioned on his execution of a
non-competition, non-solicitation and confidentiality agreement.
Under the Recupero Letter Agreement, if Mr. Recupero's employment is terminated
by the Company without Cause (as defined in the Recupero Letter Agreement), he
will be entitled to receive the following severance benefits: (i) an amount
equal to six months of his base salary, (ii) an amount equal to six months of
COBRA premiums for Mr. Recupero and his eligible dependents, (iii) any sign on
bonus installments which then remain unpaid and (iv) the vesting of that portion
of the Initial Equity Grant, if any, that was
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otherwise scheduled to vest in the ordinary course during the six month period
immediately following his termination date. Mr. Recupero's eligibility for these
severance benefits is subject to his execution of a release of claims against
the Company and his compliance with any applicable post-employment covenants.
The foregoing description of the Recupero Letter Agreement is not complete and
is qualified in its entirety by the full text of the Recupero Letter Agreement,
a copy of which is filed herewith as Exhibit 10.2 and incorporated herein by
reference.
There are no other arrangements or understandings between Mr. Recupero and any
other persons pursuant to which Mr. Recupero was named Chief Financial Officer.
Mr. Recupero does not have any family relationship with any of the Company's
. . .
Item 7.01 Regulation FD Disclosure.
On June 9, 2021, the Company issued a press release announcing the appointment
of Mr. Furlong as its President and Chief Executive Officer and Mr. Recupero as
its Chief Financial Officer, a copy of which is furnished with this Current
Report on Form 8-K as Exhibit 99.1.
The information furnished herewith pursuant to this Item 7.01 of this Current
Report on Form 8-K shall not be deemed to be "filed" for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that section, and shall not be
incorporated by reference into any registration statement or other document
under the Securities Act of 1933, as amended or the Exchange Act, except as
shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Letter Agreement, dated June 9, 2021, between GameStop Corp.
and Matthew Furlong.
10.2 Letter Agreement, dated June 9, 2021, between GameStop Corp.
and Mike Recupero.
99.1 Press release, dated June 9, 2021.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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