Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information required to be disclosed in this Item 5.02 is set forth below in
Item 8.01 of this Current Report on Form 8-K under "Special Committee
Investigation" and is incorporated herein by reference.
Item 8.01. Other Events.
Special Committee Investigation
As previously disclosed, in February 2018, the Board of Directors (the "Board")
of Guess?, Inc. (the "Company") established a special committee of the Board,
comprised of two independent directors (the "Special Committee"), to investigate
allegations of improper conduct by Mr. Paul Marciano, Executive Chairman and
Chief Creative Officer of the Company. The Special Committee, with the
assistance of independent legal counsel, Glaser Weil, LLP, has conducted and now
concluded the investigation.
Allegations against Mr. Marciano included claims of inappropriate comments and
texts, and unwanted advances including kissing and groping. Investigators
interviewed more than 40 people and reviewed approximately 1.5 million pages of
documents, including emails, human resources and legal department files, social
media messages, video and audio recordings, photographs, travel itineraries,
calendar entries, agreements, invoices and financial records.
Many of the allegations could not be corroborated. In some cases, no conclusion
could be reached because the individuals either declined to be interviewed or
provided insufficient information to the investigators. And, in other cases, the
investigation found that credible accounts were given by both sides. The
investigation found that on certain occasions Mr. Marciano exercised poor
judgment in his communications with models and photographers and in placing
himself in situations in which plausible allegations of improper conduct could,
and did, arise.
On June 7 and 11, 2018, the Special Committee presented its determinations and
recommendations to the Board. On June 11, 2018, Mr. Paul Marciano notified the
Board of his decision to resign as Executive Chairman of the Board (although he
will remain on the Board) and the Board unanimously (without the participation
of Mr. Paul Marciano and Mr. Maurice Marciano, each of whom recused himself from
the vote) appointed Mr. Maurice Marciano, as Chairman of the Board. At the same
time, Mr. Paul Marciano also notified the Board that, as contemplated by the
Company's succession plan and in anticipation of the expiration of his
employment agreement with the Company on January 30, 2019, he has begun
transitioning all of his duties and responsibilities at the Company to Mr.
Victor Herrero, Chief Executive Officer of the Company, and will fulfill the
remainder of his contract. At the same time, Mr. Paul Marciano also notified the
Board that following the expiration of his employment agreement, Mr. Paul
Marciano will not renew his employment agreement, and all of the former duties
and responsibilities of Mr. Paul Marciano will be undertaken by Mr. Herrero.
On June 11, 2018, after considering the Special Committee's determinations and
recommendations, and Mr. Paul Marciano's voluntary decision to immediately
resign as Executive Chairman of the Board and to fully transition all of his
duties and responsibilities at the Company as of the expiration of his
employment agreement with the Company on January 30, 2019, the Board unanimously
(without the participation of Mr. Paul Marciano and Mr. Maurice Marciano, each
of whom recused himself from the vote) authorized that Mr. Paul Marciano will
fulfill his duties and responsibilities through the expiration of his employment
agreement to effect a smooth transfer of responsibilities of his role as Chief
Creative Officer. During this timeframe beginning June 11, 2018, and ending
January 30, 2019, Mr. Marciano will receive his salary. Mr. Paul Marciano's
salary was forfeited for the period from February 20, 2018, until June 11, 2018.
To avoid the cost of litigation and without admitting liability or fault, the
Company and Mr. Paul Marciano entered into non-confidential settlement
agreements resolving claims of five individuals arising out of allegations of
inappropriate conduct by Mr. Paul Marciano for an aggregate total amount of
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