Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 13, 2017, the board of directors (the “Board”) of Noodles & Company (the “Company”) appointed Dave Boennighausen, 39, as the permanent Chief Executive Officer (“CEO”) of the Company, effective immediately. Also on June 13, 2017, Paul J.B. Murphy III, 62, was appointed a Class III director, filling a vacancy on the Board, and named as Executive Chairman of the Company. Mr. Murphy’s appointment will take effect on July 10, 2017, and, concurrently, Robert Hartnett will step down as non-executive Chairman of the Board but remain a director of the Company. The Board also appointed Susan Daggett, 56, Vice President of Finance at the Company, to be the interim Chief Financial Officer (“CFO”), effective immediately, to fill the vacancy created by Mr. Boennighausen’s appointment as permanent CEO.
Mr. Boennighausen served as the Company’s CFO from July 2012 through his appointment as CEO on June 13, 2017. He became a member of the Board in August 2015 and will remain a director. Mr. Boennighausen has held various roles at the Company, including Vice President of Finance and Executive Vice President of Finance, since joining the Company in 2004. He holds an MBA from the Stanford Graduate School of Business and received a BS in Finance and Marketing from Truman State University.
Mr. Murphy was appointed Del Taco Restaurants, Inc., Chief Executive Officer in February 2009 and will step down from that role in July 2017 before assuming his position as Executive Chairman of the Company. From 1996 to 2008, Mr. Murphy held various roles with Einstein Noah Restaurant Group, Inc., including serving as its President and Chief Executive Officer beginning in 2003. Mr. Murphy holds a Bachelor’s Degree in Religious Studies from Washington & Lee University.
On June 13, 2017, the Company entered into an employment agreement with Mr. Murphy (the “Murphy Agreement”) effective July 10, 2017. Pursuant to the Murphy Agreement, Mr. Murphy will receive a base salary of $550,000 per year and shall be eligible to receive an annual bonus of 50 percent of base salary upon achieving certain targeted goals that will be established by the Board. Additionally, Mr. Murphy is entitled to the following equity awards pursuant to the Company’s 2010 Stock Incentive Plan: (i) nonqualified stock options to purchase 100,000 shares of the Company’s Class A common stock, par value $0.01 per share (the “Common Stock”), that vest in in four ratable installments over four years subject to Mr. Murphy’s continued employment with the Company through the applicable vesting date; (ii) time-vesting restricted stock units with respect to 150,000 shares of Common Stock that vest in four ratable installments, subject to Mr. Murphy’s continued employment with the Company through the applicable vesting date; and (iii) performance-vesting restricted stock units with respect to 50,000 shares of Common Stock that vest upon achievement of certain performance conditions.
Under the Murphy Agreement, Mr. Murphy is also eligible for group insurance, retirement and vacation benefits that are available to the Company’s other executive employees and a payment to cover certain relocation expenses. If Mr. Murphy's employment is terminated by the Company without cause (as defined in the Murphy Agreement), he will be entitled to receive 12 months of continued base salary and Company-paid “COBRA” health continuation coverage, subject to his execution of a release of claims in favor of the Company. In addition, the Murphy Agreement prohibits Mr. Murphy from competing with the Company or soliciting its employees for twelve months following his termination of employment.
Mr. Murphy and the Company will also enter into the Company’s standard form of directors’ indemnification agreement, pursuant to which the Company agrees to indemnify its directors to the fullest extent permitted by applicable law and subject to certain conditions to advance expenses in connection with proceedings as described in the indemnification agreement.
Ms. Daggett has served as the Company’s Vice President of Finance since August 2016. She has extensive experience in the restaurant industry having served as Executive Vice President of Smiling Moose Franco, LLC, from March 2016 through July 2016, and President of Smiling Moose Deli Franchise Company from November 2013 to March 2016. Ms. Daggett was Owner and President of Nuthatch Hill Consulting, LLC, which focused on the retail and real estate industries, from January 2005 to October 2013. In connection with her appointment as interim CFO, the Company has provided Ms. Daggett with a letter pursuant to which the Company agrees to pay Ms. Daggett a nondiscretionary bonus of $8,333.00 a month, payable monthly, for the duration of her tenure as interim CFO. The nondiscretionary bonus Ms. Daggett will receive is in addition to the base salary she receives from the Company, which will remain unchanged.
The Company is commencing a search to consider both internal and external candidates for a permanent replacement for the role of CFO.
There are no family relationships between Mr. Boennighausen, Mr. Murphy, or Ms. Daggett and any director or executive officer of the Company, and they do not have any direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.