|
Item 1.01
|
Entry
into a Material Definitive Agreement.
|
On
June 28, 2017, GWG Holdings, Inc. entered into a new employment agreement with William Acheson to serve as the company’s
Chief Financial Officer and Executive Vice President. The agreement has a three-year term that includes successive one-year renewal
terms unless either party provides notice of non-renewal at least 60 days prior to the expiration of the then-current term.
The
agreement provides Mr. Acheson with an annual base salary of $320,000 (retroactive to April 1, 2017), subject to annual review
and increase (but not decrease), the right to participate in the company’s incentive compensation plan, and the right to
participate in those employee benefits made available to the company’s other management-level employees. The incentive compensation
plan is a discretionary incentive program allowing participating employees the opportunity to earn cash bonuses or options to
purchase common stock based upon the performance of the employee and the company.
The
agreement also entitles Mr. Acheson to receive an initial grant of ten-year options to purchase up to 150,000 shares of the company’s
common stock at the per-share price of $10.20. One-half of the option grant (75,000 shares) will vest ratably in annual installments
over a three-year period, and the other one-half of the option grant will vest, if at all, in annual calendar-year increments
(beginning at December 31, 2017) of 25,000 shares, subject, however, to the satisfaction of certain performance-based criteria
generally described in the agreement. The time-based and performance-based option grants are memorialized in two separate stock
option agreements entered into on June 29, 2017. The option grant was made under and subject to the terms of the company’s
2013 Stock Incentive Plan.
The
company may terminate Mr. Acheson’s employment, without cause, upon notice to him. In such an event, the company will be
obligated to pay Mr. Acheson a lump-sum severance payment in an amount equal to his then-current annual base salary, and a cash
bonus under the incentive compensation plan that is prorated based on the number of days Mr. Acheson was employed during the related
payment period under the plan. The company may also terminate Mr. Acheson’s employment for reasons constituting cause, as
defined in the agreement. In the event of a termination for cause, Mr. Acheson will be entitled to no severance or prorated cash
bonus payments.
The
agreement entitles Mr. Acheson to voluntarily resign his employment upon having given at least 30 days prior written notice to
the company, and to voluntarily resign his employment upon “good reason,” as defined in the agreement. In the event
of a resignation for good reason, Mr. Acheson will be entitled to the same severance and prorated cash bonus payments as in a
case of a company termination of his employment without cause.
The
agreement contains customary provisions obligating Mr. Acheson to maintain the confidentiality of the company’s proprietary
information both during and after his employment with the company, and provisions obligations obligating Mr. Acheson to refrain
from soliciting any employee of the company for a period of 24 months after the termination of his employment, and to refrain
from soliciting certain clients and financing relationships of the company for a period of 12 months after the termination of
his employment.
In
the event of a change of control, as defined in the agreement, the stock options granted to Mr. Acheson in connection with the
agreement (and not earlier expired or forfeited due to non-vesting) will fully vest, and Mr. Acheson will be entitled to voluntarily
resign his employment for “good reason” under the agreement.
The
foregoing summaries of the employment agreement and stock option agreement are qualified in all respects by the employment agreement
and stock option agreements themselves, copies of which are respectively being filed herewith as Exhibit 10.1 and 10.2 and incorporated
herein by this reference.