cato8k3qtr2021
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street NW
Washington, D.C. 29549
 
Form
8-K
CURRENT REPORT PURSUANT
 
TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
 
January 4, 2022
 
THE CATO CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware
1-31340
56-0484485
(State or Other Jurisdiction
of
 
Incorporation
(Commission
File Number)
(IRS Employer
Identification No.)
8100 Denmark Road
,
Charlotte
,
North Carolina
(Address of Principal Executive Offices)
28273-5975
(Zip Code)
(704)
554-8510
(Registrant’s Telephone
 
Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check
 
the
 
appropriate
 
box
 
below
 
if
 
the
 
Form
 
8-K
 
filing
 
is
 
intended
 
to
 
simultaneously
 
satisfy
 
the
 
filing
 
obligation
 
of
 
the
 
registrant
under any of the following provisions:
 
 
Written communications pursuant to Rule 425
 
under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a
 
-12)
 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
 
Act (17 CFR 240.14d-2(b))
 
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
 
Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A - Common Stock, par value $.033 per share
CATO
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company
 
as defined in as defined in Rule 405 of the Securities
Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
 
(§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company,
 
indicate by check mark if the registrant has elected not to use the extended
 
transition period for
complying with any new or revised financial accounting standards provided
 
pursuant to Section 13(a) of the Exchange Act.
2
THE CATO
 
CORPORATION
 
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
On January 4, 2022, the Company issued a press release announcing
 
that Mr. John R. Howe, its Executive
Vice President, Chief Financial Officer and the Company’s principal financial officer, will retire from
these roles effective January 17, 2022 after 35 years of service with the Company and will be
 
succeeded
by Chuck Knight as Executive Vice President, Chief Financial Officer and the Company’s principal
financial officer.
 
A copy of the press release is attached hereto as Exhibit 99.1,
 
and the contents thereof
are incorporated herein by reference.
 
To assist with the transition of his roles, Mr. Howe will continue to be employed by the Company through
May 1, 2022 under the same terms of compensation and benefits as in
 
effect at the time of his retirement.
 
Mr. Knight’s
 
appointment as Executive Vice President, Chief Financial Officer will be effective as of
January 17, 2022.
 
Mr. Knight, age 57, previously served in various roles with The Vitamin Shoppe, first
as Senior Vice President, Chief Accounting Officer from 2018 to 2019, and then as Executive Vice
President, Chief Financial Officer from 2019 to 2020.
 
Prior to that, Mr. Knight served in various roles
with Toys “R” Us for 28 years, including as Senior Vice President, Corporate Controller from 2010 to
2018.
In connection with Mr. Knight’s hiring, Mr.
 
Knight and the Company entered into a letter agreement (the
“Agreement”), effective as of January 5, 2022, that sets forth certain terms regarding
 
his employment.
 
A
copy of the Agreement is attached hereto as Exhibit 10.1.
Pursuant to the Agreement, Mr. Knight will serve as Executive Vice President and Chief Financial
Officer of the Company.
 
His initial annual base salary will be $400,000 per year.
 
Mr. Knight will be
eligible to receive a performance bonus of up to 60% of base salary
 
based upon the achievement of the
Company and individual performance goals for fiscal 2022.
 
Beginning May 1, 2022 and going forward
each May 1
st
, Mr. Knight will be eligible to be granted restricted shares of the Company’s Class A
Common Stock with a value of up to 60% of his base salary.
 
These restricted shares will be granted
pursuant to the Company’s 2018 Incentive Compensation Plan, and will vest over 5 years, with 33%
vesting on the third anniversary of the grant, 33% vesting on the fourth
 
anniversary of the grant, and the
remaining 34% vesting on the fifth anniversary of the grant.
 
The Company will also reimburse Mr.
Knight for his COBRA premiums (up to the amount the Company
 
would pay for its health and dental
coverage) until Mr. Knight is eligible to join the Company’s health and dental insurance.
In connection with Mr. Knight’s relocation to the Charlotte, North Carolina area, the Company will pay
all reasonable and customary moving charges and for Mr. Knight’s temporary housing for up to 60 days.
In addition, the Company will pay Mr. Knight a one-time relocation allowance of $30,000.
 
Mr. Knight
has agreed to reimburse the Company in full for all such moving,
 
temporary housing, relocation
allowance and other relocation expenses in the event he resigns during
 
the first 24 months of his
employment.
Mr. Knight will be entitled to participate in the Company’s employee benefit plans as provided to other
employees, including the Company’s 401(k) Plan, Employee Stock Purchase Plan and vacation plan.
 
3
Item 9.01
 
Financial Statements and Exhibits
(d) Exhibits
 
 
104
 
Cover page Interactive Data File (embedded within Inline XBRL document
 
 
 
 
4
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
 
Registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly
 
authorized.
 
THE CATO
 
CORPORATION
January 6, 2022
/s/ John P.
 
D. Cato
Date
John P.
 
D. Cato
Chairman, President and
Chief Executive Officer
January 6, 2022
/s/ John R. Howe
Date
John R. Howe
Executive Vice President
Chief Financial Officer
 
 
5
Exhibit Index
 
Exhibit
Exhibit
No.
 
10.1
99.1
104
 
Cover page Interactive Data File (embedded
within Inline XBRL document)
104
exhibit10
EXHIBIT 10.1
The CATO Corporation
January 4, 2022
Charles Knight
20 Baldwin Drive
New Providence, NJ 07974
Dear Chuck:
We
 
are
 
very
 
pleased
 
to
 
offer
 
you
 
the
 
position
 
of
 
Executive
 
Vice
 
President,
 
Chief
 
Financial
 
Officer for
The
 
Cato
 
Corporation. You
 
will
 
be
 
based
 
in
 
our
 
corporate
 
offices
 
ln
 
Charlotte,
 
NC
 
and
 
you
 
will report
to John
 
Cato, Chairman, President and
 
Chief Executive Officer.
 
Your start date will
 
be January
17, 2022.
 
This will
 
constitute “at-will”
 
employment, and
 
the offer
 
is extended
 
on the
 
following
terms:
Salary:
Your
 
starting
 
monthly
 
salary
 
will
 
be
 
$33,333.33
 
per
 
month,
which equates to an
 
annual salary of
 
$400,000. You will be paid
on the
 
last day of
 
the
 
month
 
for that
 
month.
Performance Bonus:
You will
 
be
 
eligible for
 
a
 
discretionary performance bonus potential of
up
to
 
60%
 
of
 
your
 
salary,
 
beginning
 
ln
 
April
 
2023.
 
The
performance bonus
 
will be
 
based
 
on
 
company
 
and individual
performance
 
for fiscal
 
2022.
 
Bonus
 
parameters
 
may change
from year
 
to year.
Performance Review:
The performance
 
review process
 
is
 
conducted the
 
first quarter
 
of
the
 
fiscal
 
year
 
for
 
the
 
previous
 
year.
 
Merit
 
increases
 
will
 
be
considered
 
each
 
year
 
as
 
a
 
result
 
of
 
meeting
 
corporate
 
and
individual objectives. You
 
will be eligible for a
 
merit increase for
your
 
performance
 
in
 
fiscal year
 
2022 with
 
an
 
effective
 
date
 
of
 
May
1, 2023.
Restricted Stock:
You
 
will
 
be
 
eligible
 
for
 
a
 
non-prorated
 
annual
 
LTl
 
award
 
of
Restricted Stock
 
of
 
up
 
to
 
60%
 
of
 
your
 
salary
 
effective
 
May
 
1,
 
2022,
subject
 
to
 
Plan
 
guidelines and approval by
 
the Compensation
Committee
 
of
 
the
 
Board of Directors.
 
All
 
awards are
 
subject to
 
5-
year
 
vesting
 
from
 
the
 
date
 
of grant
 
with
 
33% of
 
the
 
shares
 
vesting
at
 
the
 
end
 
of
 
the
 
third
 
year, 33%
 
of the
 
shares
 
vesting at
 
the
 
end
 
of
the
 
fourth
 
year, and
 
34%
 
of
 
the
 
shares vesting
 
at
 
the
 
end
 
of
 
the
 
fifth
year.
 
The
 
Company
 
also
 
reserves
 
the
 
right
 
to
 
change
 
Plan
guidelines.
Other Benefits:
The Cato Corporation
 
offers an excellent benefit
 
program for its
associates,
 
including,
 
among
 
other
 
things,
 
the
 
following:
 
(a)
comprehensive medical
 
and dental plans;
 
(b) a 401(k)
 
plan with
company
 
matching;
 
(c)
 
an
 
Employee
 
Stock
 
Purchase
 
Plan;
 
(d)
 
life
and
 
accidental
 
death
 
insurance;
 
(e)
 
short-term
 
and
 
long-term
disability
 
programs;
 
(f)
 
paid
 
time
 
off;
 
and
 
(g)
 
9
 
annual
 
paid
 
 
holidays.
 
In
 
addition,
 
Cato
 
has
 
agreed
 
to
 
reimburse
 
you
for
 
your
 
COBRA
 
premiums
 
(in
 
an
 
amount
 
equal
 
to
 
what
the
 
Company
 
would
 
pay
 
for
 
the
 
Company’s
 
health
 
and
dental
coverage)
 
until
 
you
 
are
 
eligible
 
to
 
join
 
the
company’s
health
 
and
 
dental
 
insurance.
 
Enclosed is
a
summary
 
of
 
benefits
 
that
 
includes
 
details
 
regarding
 
eligibility.
 
Should
you have
 
any questions about any of
 
our
benefit
 
plans,
please
 
contact
 
Beth
 
Morgan
 
(our
 
Benefits
 
Manager)
 
at
 
(704)
551-7250. Cato reserves the
 
right to change or
 
discontinue any
company benefit in the future.
Relocation:
You
 
will be
 
required to
 
relocate to
 
Charlotte, NC
 
no later
 
than
April 1, 2022. Cato
 
will pay up to
 
$40,000 to move
 
you and your
household possessions to
 
the Charlotte
 
area, as
 
well as
 
up to
60 days of temporary housing. In addition, Cato will pay a one-
time
 
relocation
 
allowance
 
of
 
$30,000
 
upon
 
establishing
 
your
primary residency
 
in the
 
Charlotte area.
 
However,
 
if within
 
the
first 24
 
months after
 
joining the
 
company you
 
decide to
 
resign
from
 
the
 
Company,
 
you
 
agree
 
to
 
immediately
 
re-pay
 
the
$30,000
 
relocation
 
allowance
 
in
 
full,
 
as
 
well
 
as
 
all
 
costs
associated
 
with
 
your
 
move
 
and
 
temporary
 
housing.
 
All
relocation
 
expenses
 
paid
 
and
 
reimbursed
 
by
 
The
 
Cato
Corporation are subject to
 
taxes.
This
 
offer
 
is
 
subject
 
to
 
satisfactory
 
reference
 
checks,
 
background
 
screening,
 
and
 
pre-
employment drug
 
screening.
 
Furthermore, you
 
must
 
provide
 
appropriate work
 
authorization
and, in compliance
 
with federal
 
law,
 
complete
 
an Employment
 
Verification
 
Form 1-9
 
and
present proof of
 
identity and employment eligibility no
 
later than
 
3 days
 
after your start date.
This offer
 
is also
 
specifically conditioned upon
 
you signing and
 
returning the
 
enclosed Mutual
Dispute Resolution Agreement (the "Agreement"). If you
 
fail to sign and deliver this Agreement
this offer of employment is void.
Chuck, we are very excited
 
about the future at The Cato Corporation, and we look forward
to you
 
joining
 
us.
 
We
 
will
 
rely on
 
you
 
to work
 
with
 
us
 
in
 
a
 
collaborative and
 
professional
manner to help us ensure our future
 
success.
Please sign this original and return it
 
to me signifying your acceptance of these terms
 
as soon
as possible.
 
A copy is also enclosed for your records.
 
Please contact me at (704) 551-7654 if
you have any questions or need assistance in any way.
/s/
 
1/4/2022
 
/s/
 
1/4/2022
 
John Cato
 
Charles Knight
 
Chairman, President
& Chief Executive Officer
 
Exhibit99
 
 
 
 
EXHIBIT 99.1
The CATO Corporation
 
NEWS RELEASE
FOR IMMEDIATE RELEASE
 
For Further Information Contact:
 
John Howe
 
EVP,
 
Chief Financial Officer
 
704-551-7315
THE CATO CORPORATION
 
ANNOUNCES CFO TRANSITION PLANS
John Howe to Retire; Chuck Knight to Become CFO
Charlotte, NC (January 4, 2022) – The Cato Corporation (NYSE: CATO) announced today that John R. Howe,
its Executive Vice President and Chief Financial Officer and the Company’s principal financial officer, plans to
retire from these roles effective January 17, 2022 following 35 years of service with
 
the Company.
 
Mr. Howe
will remain employed with the Company through May
 
1, 2022 to assist with the transition.
 
Chuck Knight will succeed Mr. Howe as Executive Vice President and Chief Financial Officer effective January
17, 2022.
 
Mr. Knight joins the Company following previous service with The Vitamin Shoppe, first as Senior
Vice President, Chief Accounting Officer, and then as Executive Vice President, Chief Financial Officer.
 
Prior
to that, Mr. Knight served as Senior Vice President, Corporate Controller for Toys “R” Us.
“I’d like to sincerely thank John Howe for his many contributions
 
to Cato over the last 35 years, including the
last 13 as CFO and in numerous positions with our finance team
 
during his career with the Company.
 
His
steady hand and effective leadership have enabled the Company to soundly
 
finance its operations and growth
over the years,” said John P.D. Cato, Chairman, President and Chief Executive Officer.
 
“He has been a true
partner to me, and we wish John well in his retirement,” Mr. Cato added.
“We are excited to welcome Chuck Knight to the Cato executive leadership
 
team,” said Mr. Cato.
 
“We believe
the extensive experience that Chuck brings to Cato will make him a valuable
 
asset to the organization.”
 
The Cato Corporation is a leading specialty retailer of value-priced
 
fashion apparel and accessories operating
three concepts,
 
"Cato," "Versona" and "It's Fashion."
 
The Company's Cato stores offer exclusive merchandise
with fashion and quality comparable to mall specialty stores at
 
low prices every day.
 
The Company also offers
exclusive merchandise found in its Cato stores at
www.catofashions.com
.
 
Versona is a unique fashion
 
destination offering apparel and accessories including jewelry, handbags and shoes at exceptional prices
every day.
 
Select Versona merchandise can also be found at
www.shopversona.com
.
 
It's Fashion offers
fashion with a focus on the latest trendy styles for the entire
 
family at low prices every day.
Statements in this press release that express a belief, expectation
 
or intention, as well as those that are not a
historical fact, are considered "forward-looking" within the meaning of
 
The Private Securities Litigation Reform
Act of 1995.
 
Such forward-looking statements are based on current expectations
 
that are subject to known
and unknown risks, uncertainties and other factors that could cause
 
actual results to differ materially from
those contemplated by the forward-looking statements.
 
Such factors include, but are not limited to, any actual
or perceived deterioration in the conditions that drive consumer confidence
 
and spending, including, but not
limited to, prevailing social, economic, political and public health conditions
 
and uncertainties, levels of
unemployment, fuel, energy and food costs, wage rates, tax rates,
 
interest rates, home values, consumer net
worth and the availability of credit; changes in laws, regulations or government
 
policies affecting our business
including but not limited to tariffs; uncertainties regarding the impact
 
of any governmental actions regarding, or
responses to, to the foregoing conditions; competitive factors and
 
pricing pressures; our ability to predict and
respond to rapidly changing fashion trends and consumer demands;
 
our ability to successfully implement our
new store development strategy to increase new store openings
 
and the
 
ability of any such new stores to grow
and perform as expected; adverse weather, public health threats (including the global coronavirus
 
(COVID-19)
pandemic) or similar conditions that may affect our sales or operations;
 
inventory risks due to shifts in market
demand, including the ability to liquidate excess inventory at anticipated
 
margins; and other factors discussed
under "Risk Factors" in Part I, Item 1A
 
of the Company's most recently filed annual report on Form
 
10-K and in
other reports the Company files with or furnishes to the SEC from time
 
to time.
 
The Company does not
undertake to publicly update or revise the forward-looking statements
 
even if experience or future changes
make it clear that the projected results expressed or implied
 
therein will not be realized. The Company is not
responsible for any changes made to this press release by
 
wire or Internet services.
# # #