Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 1 of 67 1 Robert C. Moest, Of Counsel, SBN 62166 THE BROWN LAW FIRM, P.C. 2 2530 Wilshire Boulevard, Second Floor 3 Santa Monica, CA 90403 Telephone: (310) 915-6628 4 Email: rmoest@gmail.com 5 Counsel for Plaintiff 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 10 ERIC MARCUS, derivatively on behalf of GROCERY OUTLET HOLDING 11 CORP., Case No.: 12 Plaintiff, 13 14 v. DEMAND FOR JURY TRIAL 15 JASON POTTER, CHRISTOPHER M. 16 MILLER, JOHN E. BACHMAN, MARY KAY HABEN, CAREY F. JAROS, 17 MICHAEL K. KOBAYASHI, ERIC J. 18 LINDBERG, JR. LAWRENCE P. VERIFIED SHAREHOLDER MOLLOY, GAIL MOODY-BYRD, DERIVATIVE COMPLAINT 19 ERIK D. RAGATZ, and JEFFREY R. 20 YORK, 21 Defendants, 22 and 23 24 GROCERY HOLDING CORP., 25 Nominal Defendant. 26 27 28 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 2 of 67 1 INTRODUCTION 2 Plaintiff Eric Marcus (“Plaintiff”), by Plaintiff’s undersigned attorneys, derivatively 3 and on behalf of nominal defendant Grocery Outlet Holding Corp. (“Grocery Outlet” or 4 the “Company”), files this Verified Shareholder Derivative Complaint against defendants 5 Jason Potter (“Potter”), Christopher M. Miller (“Miller”), John E. Bachman (“Bachman”), 6 Mary Kay Haben (“Haben”), Carey F. Jaros (“Jaros”), Michael K. Kobayashi 7 (“Kobayashi”), Eric J. Lindberg, Jr. (“Lindberg”), Lawrence P. Molloy (“Molloy”), Gail 8 Moody-Byrd (“Moody-Byrd”), Erik D. Ragatz (“Ragatz”), and Jeffrey R. York (“York”) 9 (collectively, the “Individual Defendants,” and together with Grocery Outlet, 10 “Defendants”) for breaches of their fiduciary duties as directors and/or officers of Grocery 11 Outlet, unjust enrichment, abuse of control, gross mismanagement, waste of corporate 12 assets, and against Defendants Potter and Miller for contribution under Sections 10(b) and 13 21D of the Securities Exchange Act of 1934 (the “Exchange Act”). As for Plaintiff’s 14 complaint against the Individual Defendants, Plaintiff alleges the following based upon 15 personal knowledge as to Plaintiff and Plaintiff’s own acts, and information and belief as 16 to all other matters, based upon, inter alia, the investigation conducted by and through 17 Plaintiff’s attorneys, which included, among other things, a review of the Defendants’ 18 public documents, conference calls and announcements made by Defendants, United States 19 Securities and Exchange Commission (“SEC”) filings, wire and press releases published 20 by and regarding Grocery Outlet, legal filings, news reports, securities analysts’ reports 21 and advisories about the Company, and information readily obtainable on the Internet. 22 Plaintiff believes that substantial evidentiary support will exist for the allegations set forth 23 herein after a reasonable opportunity for discovery. 24 NATURE OF THE ACTION 25 1. This is a shareholder derivative action that seeks to remedy wrongdoing 26 committed by the Individual Defendants from August 5, 2025 to March 4, 2026, both dates 27 inclusive (the “Relevant Period”). 28 2 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 3 of 67 1 2. Grocery Outlet is a Delaware corporation headquartered in Emeryville, 2 California, chiefly engaged in the retail consumable and produce industry. As such, the 3 Company sells a number of high-quality, name-brand products predominantly through its 4 network of independently owned stores. 5 3. Among the Company’s purported strengths is its ability to provide high- 6 quality consumable products at significantly discounted prices as compared to its industry 7 competitors. The Company cites its long-standing supplier relationships as the chief reason 8 it can offer its products at such price ranges. 9 4. Notably, in the fourth quarter of the 2024 Fiscal Year,1 the Company initiated 10 a plan to restructure its business operations, which was substantially completed by the end 11 of the second quarter of the 2025 Fiscal Year (the “Restructuring Plan”). The Company’s 12 stated reasons for conducting the Restructuring Plan as, inter alia, improving the 13 Company’s long-term financial prospects. 14 5. Throughout the Relevant Period, the Individual Defendants repeatedly 15 emphasized the Company’s guidance for the 2025 Fiscal Year. As such, the Individual 16 Defendants consistently and explicitly underlined the Company’s ability to meet its 17 expected financial goals for the 2025 Fiscal Year through, inter alia, its expansion into new 18 stores and the implementation of the Restructuring Plan. 19 6. However, the Individual Defendants failed to disclose the true nature of the 20 Company’s plans for expansion, the success of the Restructuring Plan, and its overall 21 ability to meet its expected financial goals for the 2025 Fiscal Year. More specifically, the 22 Individual Defendants failed to disclose the extent to which the Company could 23 successfully expand into new stores and implement the Restructuring Plan. 24 1 Grocery Outlet’s fiscal year does not mirror the calendar year, but instead operates on a 25 52/53 week period that ends on the Saturday closest to December 31 each year. 26 For the period between December 31, 2023 and December 28, 2024, the “2024 Fiscal Year.” 27 For the period between December 29, 2024 and January 3, 2026, the “2025 Fiscal Year.” 28 For the period between January 4, 2026 and January 2, 2027, the “2026 Fiscal Year.” 3 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 4 of 67 1 7. For example, on August 5, 2025, the first day of the Relevant Period, the 2 Company issued a press release to announce its financial results for the second quarter of 3 the 2025 Fiscal Year (the “Q2 FY 2025 Press Release”). The Q2 FY 2025 Press Release 4 stated, inter alia, that “[n]et sales increased 4.5% to $1.18 billion during the second 5 quarter,” which was allegedly due, in substantial part, to the addition of “new store sales,”2 6 namely the commencement of “11 new stores” in the second quarter of the 2025 Fiscal 7 Year.” 8 8. The Q2 FY 2025 Press Release also discussed the Restructuring Plan and 9 noted that the plan purported to, inter alia, “optimize the footprint of new store growth and 10 lower the cost base” was “substantially completed in the second quarter of fiscal 2025.” 11 9. The truth fully emerged on March 4, 2026, when the Company issued a press 12 release to announce its financial results for the fourth quarter and full 2025 Fiscal Year (the 13 “Q4 FY 2025 Press Release”). The Q4 FY 2025 Press Release quoted Defendant Potter as 14 stating “[w]e made progress on our strategic priorities in 2025; however, our fourth-quarter 15 results made clear that we have more work to do, and we’re moving quickly[.]” 16 10. That same day, the Company hosted an earnings call to discuss its financial 17 results for the fourth quarter and full 2025 Fiscal Year with investors and analysts (the “Q4 18 FY 2025 Earnings Call”). During the Q4 FY 2025 Earnings Call, Defendant Potter stated 19 that the Company had “made the difficult decision to close 36 locations” and explained 20 that “it’s clear now that we expanded too quickly, and these closures are a direct 21 correction.” 22 11. On this news, the price per share of the Company’s common stock fell roughly 23 $2.45, or approximately 27.9%, from a price per share of $8.79 at the close of trading on 24 March 4, 2026 to close at approximately $6.34 per share on March 5, 2026. 25 12. During the Relevant Period, the Individual Defendants, in breach of their 26 fiduciary duties owed to Grocery Outlet, willfully or recklessly made and/or caused the 27 28 2 Unless otherwise stated, all emphasis is added. 4 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 5 of 67 1 Company to make false and misleading statements. Specifically, the Individual Defendants 2 willfully or recklessly made and/or caused the Company to make false and misleading 3 statements that failed to disclose, inter alia, that: (1) the Restructuring Plan would require 4 additional store closures and asset write-downs in order to achieve operational goals; (2) 5 the Company’s asserted financial growth was due to its rapid expansion into new stores; 6 (3) the Company’s expansion into new stores was unsustainable; (4) as a result of the 7 foregoing, the Company was unable to achieve its previously issued financial guidance; 8 and (5) the Company failed to maintain internal controls. As a result of the foregoing, the 9 Individual Defendants caused the Company’s public statements to be materially false and 10 misleading at all relevant times. 11 13. The Individual Defendants failed to correct and/or caused the Company to fail 12 to correct these false and misleading statements and omissions of material fact, rendering 13 them personally liable to the Company for breaching their fiduciary duties. 14 14. Additionally, in breach of their fiduciary duties, the Individual Defendants 15 caused the Company to fail to maintain adequate internal controls. 16 15. The Company has been substantially damaged as a result of the Individual 17 Defendants’ knowing or highly reckless breaches of fiduciary duty and other misconduct. 18 16. In light of the Individual Defendants’ misconduct—which has subjected the 19 Company, its President and Chief Executive Officer (“CEO”), and its Executive Vice 20 President (“EVP”) and Chief Financial Officer (“CFO”) to a federal securities fraud class 21 action pending in the United States District Court for the Northern District of California 22 (the “Securities Class Action”), which has further subjected the Company to the need to 23 undertake internal investigations, the need to implement adequate internal controls, losses 24 from the waste of corporate assets, and losses due to the unjust enrichment of the Individual 25 Defendants who were improperly overcompensated by the Company and/or who benefitted 26 from the wrongdoing alleged herein—the Company will have to expend many millions of 27 dollars. 28 5 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 6 of 67 1 17. The Company has been substantially damaged as a result of the Individual 2 Defendants’ knowing or highly reckless breaches of fiduciary duty and other misconduct. 3 18. In light of the breaches of fiduciary duty engaged in by the Individual 4 Defendants, the majority of whom are the Company’s current directors, of the collective 5 engagement in fraud and misconduct by the Company’s directors, of the substantial 6 likelihood of the directors’ liability in this derivative action and Defendants Potter and 7 Miller’s liability in the Securities Class Action, their being beholden to each other, their 8 longstanding business and personal relationships with each other, and of their not being 9 disinterested or independent directors, a majority of the Board cannot consider a demand 10 to commence litigation against themselves and the other Individual Defendants on behalf 11 of the Company with the requisite level of disinterestedness and independence. 12 JURISDICTION AND VENUE 13 19. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 14 because Plaintiff’s claims raise a federal question under Section 10(b) of the Exchange Act 15 (15 U.S.C. §§ 78j(b)) and Section 21D of the Exchange Act (15 U.S.C. § 78u-4(f)). 16 Plaintiff’s claims also raise a federal question pertaining to the claims made in the 17 Securities Class Action based on violations of the Exchange Act. 18 20. This Court has supplemental jurisdiction over Plaintiff’s state law claims 19 pursuant to 28 U.S.C. § 1367(a). 20 21. This derivative action is not a collusive action to confer jurisdiction on a court 21 of the United States that it would not otherwise have. 22 22. Venue is proper in this District pursuant to 28 U.S.C. §§ 1391 and 1401 23 because a substantial portion of the transactions and wrongs complained of herein occurred 24 in this District, Defendants have conducted business in this District, and Defendants’ 25 actions have had an effect in this District. 26 PARTIES 27 Plaintiff 28 6 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 7 of 67 1 23. Plaintiff is a current shareholder of Grocery Outlet. Plaintiff has continuously 2 held Grocery Outlet common stock since first purchasing shares on January 9, 2023. 3 Nominal Defendant Grocery Outlet 4 24. Grocery Outlet is a Delaware corporation with principal executive offices at 5 5650 Hollis Street, Emeryville, California 94608. Grocery Outlet’s common stock trades 6 on the Nasdaq Global Select Market (“Nasdaq”) under the ticker symbol “GO.” 7 Defendant Potter 8 25. Defendant Potter has served as the Company’s President, CEO, and as a 9 Company director since February 2025. 10 26. The Schedule 14A the Company filed with the SEC on April 17, 2025 (the 11 “2025 Proxy Statement”) stated the following about Defendant Potter, in relevant part: 12 Since Feb. 2025, [Defendant Potter] served as President and Chief Executive 13 Officer at Grocery Outlet. From Mar. 2020 to Jan 2025, [Defendant Potter] 14 served as Chief Executive Officer and director at The Fresh Market, Inc., a specialty grocery retailer of fresh, gourmet food and prepared meals. From 15 1990 to June 2018, [Defendant Potter] served in successively senior positions 16 at Sobeys Inc., a Canadian food and drug retailer and wholly owned subsidiary of The Empire Company Limited, including most recently as Executive Vice 17 President of Operations (May 2017 to June 2018). Prior to that, he served as 18 P resident of Sobeys West, President of Sobeys Atlantic and President of Multi-Format Operations. 19 20 * * * 21 Skills and Qualifications Relevant to Service on our Board 22 • More than 30 years of grocery retail experience and a merchant at heart, with 23 a track record of growing and scaling grocery businesses of significant 24 complexity to drive earnings growth and shareholder value. Most recently, at The Fresh Market, he led the successful transformation of the business to 25 strong earnings growth, as well as driving an award-winning customer 26 experience that led to its selection as USA Today’s Readers’ Choice “Best Supermarket in America” in 2021, 2022 and 2023. At Sobeys, one of the 27 largest food retailers in North America, he oversaw store operations for 28 7 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 8 of 67 1 approximately 1,500 stores under several banners with more than $12 billion in revenues. 2 3 • Strong executive leadership experience, with more than 17 years of profit and loss leadership of The Fresh Market and numerous brands at Sobeys. Has 4 led numerous transformational strategic projects for turnaround, growth and 5 mature brands, and has strong financial expertise. Initiated key innovations, including e-commerce and private label development opportunities. 6 7 • Particular expertise in large-scale operations, complex supply chain and logistics, marketing, merchandising and strategy. Spent early career learning 8 the retail food business through numerous jobs of increasing responsibility, 9 including developing significant expertise in managing stores and distribution centers, real estate site selection as well as merchandising and marketing. 10 11 • As President and CEO, he is our operational and strategic day-to-day leader, and his vision, values and hands-on communication style aligns with the 12 Company’s goals and culture. Understands how to lead a customer-centric 13 business model that emphasizes the store experience and customer loyalty. 14 • His prior experience as a combined CEO and a director of a private food and 15 drug retailer provides him with relevant governance, risk management and strategic oversight expertise, as well as experience serving in dual capacities 16 as an executive and director. 17 • Depth of experience with a franchise operating model at Sobeys, which has 18 many similarities to Grocery Outlet’s independent operator model. 19 (Emphasis in original). 20 21 Defendant Miller 22 27. Defendant Miller has served as the Company’s EVP and CFO since January 23 6, 2025. 24 28. The 2025 Proxy Statement stated the following about Defendant Miller: 25 Mr. Miller previously served as Chief Financial Officer at Shamrock Foods 26 Company, the largest family-held food service distributor in the western United States, since January 2023. From January 2007 to June 2022, he held 27 several roles of increasing responsibility at Core-Mark Holding Co., a leading 28 8 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 9 of 67 1 marketer of fresh food and broad-line supply solutions to the convenience retail industry in North America, including most recently as Core-Mark’s 2 Chief Financial Officer from January 2016 to June 2022. Prior to Core-Mark, 3 he held various financial and accounting roles since 1983, including at Cost Plus World Market, formerly known as Cost Plus Inc. (2002 to 2006), Echo 4 Outsourcing (2000 to 2002) and Levi Strauss & Co. (1996 to 2000). 5 (Emphasis in original). 6 7 Defendant Bachman 8 29. Defendant Bachman has served as a Company director since November 2019. 9 Defendant Bachman currently serves as the Chair of the Audit and Risk Committee and as 10 a member of the Compensation Committee. 11 30. The 2025 Proxy Statement stated the following about Defendant Bachman, in 12 relevant part: 13 Since 2016, [Defendant Bachman] has been an outside director for various 14 public companies since his retirement. [From] 1978 to 2015, [Defendant Bachman served as a] former Certified Public Accountant at the global 15 accounting firm, PricewaterhouseCoopers LLP, most recently as a partner 16 (1989 to 2015). At PwC, [Defendant] Bachman served for six years (2007 to 2013) as the Operations Leader of the firm’s U.S. Assurance Practice with full 17 operational and financial responsibility for this $4 billion line of business, 18 which included the firm’s audit and risk management practices. Prior to this role, [Defendant] Bachman served for three years as the firm’s U.S. Strategy 19 Leader (2004 to 2007) where he was responsible for strategic planning across 20 business units, geographies and industries. [Defendant] Bachman also served as an audit partner for over 25 years for companies in the industrial 21 manufacturing, financial services, publishing, healthcare and other industries. 22 * * * 23 24 Skills and Qualifications Relevant to Service on our Board 25 • Extensive financial and accounting expertise, as well as business strategy, internal controls, financial reporting and enterprise risk oversight experience, 26 from serving as a partner (as a former Certified Public Accountant) and in 27 leadership roles for one of the world’s largest accounting firms. In addition, he has served as Chair of our Audit Committee since Nov. 2019, as well as 28 9 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 10 of 67 1 the Audit Committee and Finance Committee of numerous other public companies in recent years. He has been determined by our Board to be an 2 audit committee financial expert. 3 • Possesses public company director experience through his substantial board 4 and board committee service in recent years for companies in a variety of 5 industries, including an omnichannel retailer. 6 • Through many years of senior leadership at PwC, he has deep experience in 7 operations, finance, risk management and strategic planning of a large, complex organization. 8 • Has retail experience through his lengthy board and board committee service 9 to The Children’s Place. 10 11 (Emphasis in original). 12 Defendant Haben 13 31. Defendant Haben has served as a Company director since November 2019. 14 Defendant Haben currently serves as the Chair of the Nominating and Corporate 15 Governance Committee and as a member of the Compensation Committee. 16 32. The 2025 Proxy Statement stated the following about Defendant Haben, in 17 relevant part: 18 Since 2011, she has been an outside director for various public companies 19 since her retirement. [From] Apr. 2007 to Feb. 2011, she held senior positions with Wm. Wrigley Jr. Company, a confectionery company, including 20 President, North America (Oct. 2008 to Feb. 2011) and Group Vice President 21 and Managing Director, North America (Apr. 2007 to Oct. 2008). Wrigley was public until October 2008, following which it became a subsidiary of 22 Mars, Incorporated. Prior, she led several multi-billion divisions during her 23 27-year career with Kraft Foods, Inc., a grocery manufacturing and processing conglomerate, including Senior Vice President, Open Innovation (2006 to 24 2007), Senior Vice President, Global Snack Sector (2004 to 2006), and Group 25 Vice President, Kraft Foods and President, Cheese, Enhancers and Meals (2001 to 2004). 26 27 * * * 28 10 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 11 of 67 1 Skills and Qualifications Relevant to Service on our Board 2 • Possesses substantial M&A, operating, digital, marketing, and brand 3 management and development experience from long-term senior executive roles for consumer-packaged goods/food companies, including a strong track 4 record in delivering value to shareholders and consumers through brand 5 building, developing new products, innovation and implementation of business strategies in various markets and media platforms. Has deep 6 knowledge of and ability to analyze the overall consumer-packaged goods 7 industry, evolving market dynamics and consumers’ relationships with brands. Executive experience also included numerous years of direct reports 8 in sales, R&D and supply chain. 9 • Long-tenured current board member of two public companies, and a former 10 long-term board member of a third public company. Significant oversight 11 expertise in governance, compensation, finance, digital transformations and AI, digital and social marketing, supply chain strategy, ESG and enterprise 12 risk management (including cybersecurity risks) from serving on public 13 company boards, including numerous leadership and board committee roles, since her retirement in 2011. Experience includes two significant 14 directorships with consumer-packaged goods/food companies. 15 • The breadth of experience and expertise leading boards and board 16 committees, as well as serving in executive management roles, enable her to 17 provide critical insights in overseeing and partnering with management. 18 (Emphasis in original). 19 Defendant Jaros 20 33. Defendant Jaros has served as a Company director since September 2020. 21 Defendant Jaros currently serves as the Chair of the Compensation Committee. 22 34. The 2025 Proxy Statement stated the following about Defendant Jaros, in 23 relevant part: 24 25 Since Oct. 2014, she has served in various executive positions at GOJO Industries, Inc., a global manufacturer of hand hygiene and surface 26 disinfecting products and the maker of PURELL® brand Hand Sanitizer, 27 including as President and Chief Executive Officer (since Jan. 2020), Chief Operating Officer (July 2018 to Jan. 2020), Chief Strategy Officer (May 2016 28 11 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 12 of 67 1 to July 2018), and a member of the Board of Directors of GOJO (since Feb. 2019). She also served as President of the private family office for GOJO’s 2 owners, Walnut Ridge Strategic Management Company, and was a member 3 of GOJO’s Board of Directors, and a Board Director for several other portfolio companies, while in that role (Oct. 2014 to Apr. 2016). From Apr. 2011 to 4 Oct. 2014, she was employed at Dealer Tire, a tire and parts distributor for 5 automotive OEMs and Dealers, as Vice President, OEM Programs (Feb. 2014 to Oct. 2014) and Vice President, Strategy, Business Development and 6 Finance (Apr. 2011 to Feb. 2014). [From] June 2000 to Apr. 2011, she served 7 in various roles at Bain and Company, a management consulting firm, including Senior Manager where she led consulting projects in retail and 8 consumer products. 9 * * * 10 11 Skills and Qualifications Relevant to Service on our Board 12 • Possesses substantial executive management expertise on a broad range of 13 management topics, including developing corporate strategy, recruiting and developing a senior executive team, assessing emerging industry trends as 14 well as optimizing business operations. 15 • Developed extensive knowledge as a global consumer and industrial 16 products leader throughout her career. At GOJO, the PURELL omnichannel 17 and consumer business directly reports to her, including sales to all U.S. retailers and through e-commerce. At Bain, she spent more than 10 years 18 primarily advising retail, consumer products and industrial sectors, including 19 numerous public and private companies involved in food manufacturing and production. 20 21 • Oversees direct reports leading brand and consumer marketing since 2016 at GOJO, including responsibility for the marketing organization and leadership 22 of brand strategy matters. 23 • Led a massive supply chain systems redesign following the COVID 24 pandemic, including facilities, systems and equipment, to drive high-growth 25 by more than doubling global production in a short time across North America and Europe. Redesign and scaling the business for significantly higher 26 demand included overseeing the implementation of significant automation 27 technology, including a state-of-the-art material handling system for 28 12 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 13 of 67 1 distribution operations and similar to what is used by major retailers and distributors in retail and consumer goods industries. 2 3 • Developed financial and accounting expertise through executive roles, including debt restructuring and refinancings, and previously was determined 4 by our Board to be an audit committee financial expert during her service on 5 our Audit and Risk Committee. 6 • Is a member of GOJO’s sustainable value steering team that drives its 7 strategy. 8 • Is a member of GOJO’s Audit and Risk, People and Culture, and Finance 9 committees. 10 • Private board service and advisory roles provide additional governance, 11 compensation and strategic oversight experience. 12 (Emphasis in original). 13 Defendant Kobayashi 14 35. Defendant Kobayashi has served as a Company director since June 26, 2025. 15 Defendant Kobayashi currently serves as a member of the Audit and Risk Committee. 16 36. The current report on Form 8-K the Company filed with the SEC on June 26, 17 2025 stated the following about Defendant Kobayashi: 18 19 Mr. Kobayashi has extensive executive leadership experience in retail technology, supply chain and store operations, including over 20 years in 20 executive roles with Ross Stores, Inc. (Nasdaq: ROST), a public company 21 discount retailer, where he currently serves as an advisor. During his tenure at Ross Stores, Mr. Kobayashi served as the President and Chief Capability 22 Officer from February 2022 to March 2025; President, Operations and 23 Technology from August 2019 to January 2022; Group Executive Vice President, Supply Chain, Allocation, Merchant Operations and Technology 24 from 2015 to 2019; Executive Vice President, Supply Chain, Inventory 25 Allocation and Chief Information Officer from 2010 to 2014; Group Senior Vice President, Supply Chain and Chief Information Officer from 2008 to 26 2010; and Senior Vice President and Chief Information Officer from 2004 to 27 2008. From 1986 to 2004, he served in various roles of increasing responsibility at Accenture plc (NYSE: ACN), including as a Partner from 28 13 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 14 of 67 1 2000 to 2004. Mr. Kobayashi holds a Bachelor of Science in Managerial Economics from the University of California, Davis. 2 3 Defendant Lindberg 4 37. Defendant Lindberg has served as a Company director since January 2006, 5 and as Chairman of the Board since January 2023. Previously, Defendant Lindberg served 6 as the Company’s interim President and CEO from October 2024 to February 2025. 7 Moreover, Defendant Lindberg served the Company in various capacities from 1996-2022, 8 including as the Company’s CEO from January 2019 to December 2022 and as the 9 Company’s Co-CEO from January 2006 to December 2018. Moreover, the 2025 Proxy 10 Statement notes that Defendant Lindberg “has a direct or indirect material interest in 11 entities which receive over 5% of their annual consolidated revenue from the Company[.]” 12 38. The 2025 Proxy Statement stated the following about Defendant Lindberg, in 13 relevant part: 14 [From] October 2024 to February 2025, [Defendant Lindberg] served as 15 Interim President and Chief Executive Officer at Grocery Outlet. [From]1996 to 2022, [Defendant Lindberg] served various positions at Grocery Outlet and 16 its predecessor, including as Chief Executive Officer (Jan. 2019 to Dec. 2022) 17 and Co-Chief Executive Officer (Jan. 2006 to Dec. 2018). 18 Skills and Qualifications Relevant to Service on our Board 19 • Possesses significant experience in the retail and consumer packed goods 20 industries, garnered over his 26-year tenure with us, including 17 years as 21 CEO or co-CEO. From 2000 to 2022, active member of the GMA/FMI (Grocery Manufacturers of America/Food Marketers Institute) and a member 22 of CGA board (California Grocers Association 2014-2019). 23 • Proven executive manager, including long service to Grocery Outlet as a 24 private company and then as a public company following our IPO in June 25 2019. Eric’s 17-year run as co-CEO and CEO was transformative for Grocery Outlet. Under his leadership, Grocery Outlet grew its store base from 123 to 26 441 stores, or 259%, and revenues from $612.6 million to $3.58 billion, or 27 484%, and developed a bi-coastal store footprint. He led sharing our vision 28 14 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 15 of 67 1 and strategy in the IPO and thereafter in developing key stockholder relationships. 2 3 • Eric’s deep knowledge of our operations, finances, strategies and industry facilitates a strategic vision to set the overall tone and direction of the 4 Company as well as clear leadership through consistency. As our leading 5 executive, he implemented fundamental strategic initiatives that enhanced our differentiated model for buying and selling, and strengthened our 6 relationships with entrepreneurial Independent Operators that run most of our 7 stores, combining to deliver a “WOW!” shopping experience. In his current oversight role, his unique insights on future strategy and initiatives will 8 continue to be invaluable to our Board. 9 • Exhibited strong growth focus across all macroeconomic cycles, as 10 demonstrated by our pattern of positive comparable store sales growth and 11 healthy gross margin rates. For example, our comparable store sales increased for 19 out of 20 years through fiscal 2022. 12 13 • Long-standing role with our Board and management allows him to provide a unique perspective regarding oversight of enterprise risk management, 14 including focusing on the most critical risks and evaluating risk mitigation 15 activities. 16 • Has alignment with our other stockholders due to his meaningful stock 17 ownership in the Company. 18 (Emphasis in original). 19 Defendant Molloy 20 39. Defendant Molloy has served as a Company director since June 26, 2025. 21 Defendant Molloy currently serves as a member of the Audit and Risk Committee. 22 40. The current report on Form 8-K the Company filed with the SEC on June 26, 23 2025 stated the following about Defendant Molloy: 24 25 Mr. Molloy has extensive leadership experience and over 25 years of experience in financial, accounting, financial reporting, grocery, consumer 26 products, high-growth retail, enterprise risk and global matters, including 27 through numerous executive and director roles for various public companies. Mr. Molloy previously served as the Chief Financial Officer of Sprouts 28 15 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 16 of 67 1 Farmers Market, Inc. (Nasdaq: SFM) from September 2021 to December 2023, and prior to that, as Interim Chief Financial Officer from June 2019 to 2 February 2020. He previously served as Chief Financial Officer or in other 3 financial and accounting roles for numerous public and private companies since 1998. Mr. Molloy has 19 years of collective experience serving as a 4 public company board director for six companies, including serving as Chair 5 of the Audit Committee for each board. He currently serves as a board director of Sally Beauty Holdings, Inc. (NYSE: SBH), Pet Valu Holdings Ltd. (TSX: 6 PET.TO), and BRC Inc. (d/b/a Black Rifle Coffee Company) (NYSE: 7 BRCC). Previously, he served as a director for Sprouts Farmers Market, Inc. from 2013-2021, for Torrid Holdings Inc. (NYSE:CURV) from 2018 to 2021, 8 for Party City Holdings Inc. (NYSE:PRTY) from 2014 to 2016 and for 9 Wingstop Inc. (NASDAQ:WING) from 2015 to 2016. Prior to his business career, Mr. Molloy served as a U.S. Navy fighter pilot for 10 years, later 10 retiring from the Naval Reserve with the rank of Commander. He holds 11 Master of Business Administration from the University of Virginia and a Bachelor of Science in Computer Science from the United States Naval 12 Academy. 13 Defendant Moody-Byrd 14 41. Defendant Moody-Byrd has served as a Company director since January 15 2021. Defendant Moody-Byrd currently serves as a member of the Nominating and 16 Corporate Governance Committee. 17 42. The 2025 Proxy Statement stated the following about Defendant Moody- 18 Byrd, in relevant part: 19 20 Since March 2022, [Defendant Moody-Byrd has served as] Vice President, Marketing of LinkedIn Sales Solutions at LinkedIn Corporation, the world’s 21 largest social professional network and a division of Microsoft Corporation. 22 [From] November 2018 to February 2022, [Defendant Moody-Byrd served as] Chief Marketing Officer of Noodle.ai, a software company focused on AI 23 innovation in the global supply chain industry. [From] September 2007 to 24 October 2018, [Defendant Moody-Byrd] served various sales and marketing positions at SAP SE, a multinational enterprise software application company, 25 including most recently as Vice President, Head of Web Marketing (Jan. 2018 26 to Oct. 2018), and Senior Director, Growth Strategies, Digital and Social Channels (May 2017 to Dec. 2017). [From] February 2001 to August 2007, 27 [Defendant Moody-Byrd] served various marketing and corporate 28 16 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 17 of 67 1 development positions at Palm, a software developer and manufacturer of smartphones for consumers and enterprises. In prior years, she had retail 2 industry roles with divisions of Federated Department Stores and Target 3 Corporation, with Levi, Strauss & Co., as well as retail consultant roles with McKinsey & Company and Walker K. Levy Associates. 4 5 * * * 6 Skills and Qualifications Relevant to Service on our Board 7 • Developed significant marketing and brand management expertise, 8 including in driving brand awareness and demand generation as well as 9 leading technology and data-driven consumer marketing, through more than 35 years in B2B technology marketing and retail/wholesale industry 10 consulting, merchandising and planning. 11 • Early career focused on retail industry matters, including serving as a retail 12 consultant for national and global brands, as well as a merchandiser, buyer, 13 and brand manager. At Noodle.ai, she drove brand awareness and revenue generation for a high-growth supply chain software company targeting global 14 consumer packaged goods companies. 15 • Has had recent involvement in strategic planning and other executive 16 management matters at LinkedIn, and operated as a member of the C-suite at 17 Noodle.ai, including quarterly board meeting presentations with the private equity-led board. 18 19 • At SAP, she spent five years as the digital marketing lead for the SAP Community Network, an online loyalty community of over two million 20 customers undertaking various stages of large-scale digital transformations 21 through SAP software implementations, thereby developing familiarity with 22 various stages of the customer experience in such projects. 23 (Emphasis in original). 24 Defendant Ragatz 25 43. Defendant Ragatz has served as a Company director since October 2014, and 26 as the Company’s Lead Independent Director since January 2023. Previously, Defendant 27 Ragatz served as the Chairman of the Board from October 2014 to December 2022. 28 17 Verified Shareholder Derivative Complaint
Case 4:26-cv-03116-KAW Document 1 Filed 04/13/26 Page 18 of 67 1 Defendant Ragatz currently serves as a member of the Compensation Committee and as a 2 member of the Nominating and Corporate Governance Committee. 3 44. The 2025 Proxy Statement stated the following about Defendant Ragatz, in 4 relevant part: 5 Since Sept. 2001, [Defendant Ragatz] served various positions at Hellman & 6 Friedman LLC, a global private equity firm focused on investing in high- 7 quality, growth-oriented business, including as Senior Advisor (since Feb. 2023), Partner (Jan. 2008 to Feb. 2023), and Director/Principal (Sept. 2001 to 8 Dec. 2007). Prior, [Defendant Ragatz] served in various positions at Bain 9 Capital, LP, a global private equity firm, and Bain & Company, a global management consultancy. 10 11 * * * 12 Skills and Qualifications Relevant to Service on our Board 13 • Developed significant strategic and operations expertise for retail, supply 14 chain and logistics matters through leading H&F’s efforts to invest in high- 15 growth global companies in the consumer, retail and industrial sectors, and taking leadership roles on the boards and board committees of the relevant 16 portfolio companies for over 20 years. 17 • Strong other public company director experience through his board and 18 board committee service at Snap One and LPL Financial, and together with 19 his significant private company director experience, he has a unique expertise in corporate governance. His significant leadership roles on boards outside of 20 our Board include serving as Chairman or Lead Independent Director of six 21 companies (including one public company), Chair of the Compensation Committee of three companies, Chair of the Audit Committee of three 22 companies (including one public company) and Chair of the Nominating and 23 Corporate Governance Committee of one public company. This breadth of experience and expertise leading boards and board committees enables him to 24 provide critical insights in overseeing and partnering with management of 25 high-growth companies. 26 • Through serving as Chairman or a member of numerous Audit Committees 27 of public and private companies, being a senior leader on H&F’s investment 28 team and leading H&F’s macro-economic research and forecasting, he has 18 Verified Shareholder Derivative Complaint