Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Leah Stearns as Senior Vice President and Chief Financial
Officer.
On December 1, 2022, the Board of Directors of Copart, Inc. (the "Company")
appointed Leah C. Stearns, age 42, as the Company's senior vice president and
chief financial officer, effective as of December 5, 2022. Upon Ms. Stearns'
commencement of employment with the Company, Gavin Renfrew, currently serving as
principal financial officer, will continue his role as the Company's vice
president for global accounting.
Ms. Stearns currently serves as an industrial advisor to EQT Partners, a private
equity firm. From August 2021 to December 2021, Ms. Stearns served as a senior
executive at CBRE Group, Inc. (NYSE: CBRE), a global leader in commercial real
estate services and investments, as an advisor to the chief executive officer
and the chief financial officer. Ms. Stearns served as the chief financial
officer of CBRE Group, Inc. from May 2019 to July 2021. Prior to joining CBRE
Group, Inc., Ms. Stearns served for 17 years in a variety of leadership roles
with American Tower Corporation, a leading independent owner, operator, and
developer of multitenant communications real estate, where she most recently
served as senior vice president and chief financial officer of its U.S.
division. Earlier she held various corporate finance roles, including senior
vice president, corporate finance and treasurer. She also served as chief
executive officer of EMEA, overseeing the region's operational performance and
strategy. Ms. Stearns earned her B.S. from Boston College University in 2001,
and her M.B.A. from Boston University in 2003.
Under the terms of an Executive Officer Employment Agreement, effective December
5, 2022, Ms. Stearns will receive a base salary of $550,000 per year. Ms.
Stearns will be eligible to receive an annual cash bonus with a target amount of
$450,000 under the terms of the Company's executive incentive compensation plan,
pro-rated for the portion of fiscal year 2023 that she serves as senior vice
president and chief financial officer.
The Company's compensation committee has approved three separate equity
incentive awards to Ms. Stearns as part of her initial executive compensation
package. First, the compensation committee has approved a grant of 60,000
restricted stock units. The restricted stock units will vest over five years
from December 5, 2022, with 20% vesting on the first anniversary of her service,
and 1/20 of the restricted stock units subject to the award vesting each
three-month quarter thereafter, such that all of the restricted stock units will
be fully vested on the fifth anniversary of the grant date.
Next, the Company's compensation committee has approved a regular service-based
option grant to Ms. Stearns to purchase 30,000 shares of the Company's common
stock. This option will be subject to the terms and conditions of the Company's
Amended and Restated 2007 Equity Incentive Plan and form of stock option
agreement, and will be subject to vesting as follows: 20% of the shares will
vest on the first anniversary of the December 5, 2022 date of grant, and the
balance of the shares will vest ratably over the 48 months thereafter, such that
the option will be fully vested on the fifth anniversary of the date of grant.
Lastly, the Company's compensation committee has approved a special
performance-based option grant to Ms. Stearns to purchase 150,000 shares of the
Company's common stock. This option will be subject to the terms and conditions
of the Company's Amended and Restated 2007 Equity Incentive Plan and form of
stock option agreement, and will be subject to both service-based vesting and
additional performance-based vesting conditions. Under the service-based vesting
schedule, 20% of the shares will vest on the first anniversary of the December
5, 2022 date of grant, and the balance of the shares will vest ratably over the
48 months thereafter, such that the option will be fully vested on the fifth
anniversary of the date of grant. In addition to the service-based vesting
schedule, the special performance-based option is subject to a performance-based
vesting condition and will not be exercisable unless and until the trading price
of the Company's common stock on the Nasdaq Global Select Market is an amount
greater than or equal to 125% of the per-share exercise price of the special
performance-based stock option award, which must be satisfied (i) on the moment
of exercise, and (ii) at the closing trading price for each of the twenty
consecutive trading days preceding the date of exercise.
Ms. Stearns' employment agreement provides that in the event her employment is
involuntarily terminated other than for disability or "cause" or she resigns
from her employment for "good reason" (as defined in the employment agreement),
and conditioned on her executing a severance agreement and release of claims,
she will be entitled to a lump sum payment equal to fifty percent (50%) of her
then-current annual base salary, less applicable tax withholding. Ms. Stearns'
employment agreement also provides that in the event her employment is
terminated for any reason other than as previously described, including by
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reason of death or disability or "cause," then she shall be entitled to receive
severance benefits as provided under the Company's then-existing severance and
benefit plans and policies at the time of termination.
Ms. Stearn's employment agreement does not provide for severance payments or
acceleration of vesting of equity awards in the event of a change in control of
the Company. In the event of a "change in control" (as defined in our Amended
and Restated 2007 Equity Incentive Plan), if the awards to be granted are not
assumed by the successor corporation, the compensation committee has the
authority as administrator of the equity plan to accelerate the vesting of the
awards.
Ms. Stearns' employment agreement does not provide for payment of any amount in
connection with termination of employment upon a change in control of the
Company, other than those payments otherwise due to Ms. Stearns' upon an
involuntary termination or resignation for "good reason." No payments are due in
the event of voluntary termination of employment or termination of employment as
a result of death or disability or for "cause."
The summary description of Ms. Stearns' Executive Officer Employment Agreement
set forth above does not purport to be complete and is qualified in its entirety
by reference to the Executive Officer Employment Agreement effective as of
December 5, 2022 that will be attached as an exhibit to the Company's quarterly
report on Form 10-Q for the three-month period ending January 31, 2023.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibits are furnished herewith:
Exhibit
Number Description
104 Cover Page Interactive Data File, formatted in Inline Extensible
Business Reporting Language (iXBRL).
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