Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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(b), (c) and (e) On March 1, 2018, the Company announced that Ann B. Gugino has transitioned from her role as the Companys Executive Vice
President, Chief Financial Officer and Treasurer, effective immediately, and that Dennis Goedken, the Companys Controller, has been appointed by the Companys Board of Directors (the Board) to serve as the Companys
Interim Chief Financial Officer and Treasurer while the Company conducts a search for a successor. The Company has retained an executive search firm to begin an immediate search for a permanent replacement.
Mr. Goedken, age 55, has spent more than 12 years with Patterson having served as the Corporate Controller since 2012, and as Pattersons Assistant
Controller from 1991-1998. During his tenure, Mr. Goedken was integrally involved in internal audit, taking the company public, and various divestitures and acquisitions. Mr. Goedken currently leads the accounting team and oversees
preparation of all SEC filings. Previously, Mr. Goedken has held senior finance leadership positions with Ceridian HCM, Inc. and Lifetouch Inc. There are no familial relationships between Mr. Goedken and any other director or executive
officer of the Company. There are no transactions in which Mr. Goedken has an interest requiring disclosure under Item 404(a) of Regulation
S-K.
In connection with the transition, Ms. Gugino and the Company entered into a Transition Agreement, dated March 1, 2018, which is filed as Exhibit 10
to this Current Report on Form
8-K
and is incorporated by reference herein. Under the terms of the agreement, Ms. Gugino will serve in a
non-officer
Special Advisor
capacity through July 31, 2018 during which period she has agreed to be available to the Company to advise on certain matters at its sole request. On July 31, 2018, Ms. Guginos employment with the Company will end (the
Separation Date). The period between March 1, 2018 and the Separation Date or Ms. Guginos earlier termination date is the Transition Period. Ms. Gugino will remain subject to termination for cause during
the Transition Period. Ms. Gugino has also agreed to certain
non-compete
and
non-solicit
provisions described below.
During the Transition Period, conditioned upon Ms. Guginos continued employment during that time, she will (a) continue to be paid her current
annualized salary of $430,500, (b) remain eligible to receive
non-equity
incentive plan compensation for the fiscal year ending April 28, 2018 under the Companys Management Incentive Compensation
Plan, (c) continue to vest in her existing equity awards, and (d) remain eligible to participate in the Companys Capital Accumulation Plan, the Companys Employee Stock Ownership Plan and the Companys other employee
benefit plans, subject to plan terms. Upon signing a separation and release agreement at the end of the Transition Period, unless she has been terminated for cause, Ms. Gugino will receive a severance payment of $648,000 (the Severance
Payment), which will be paid in installments of varying amounts over the course of the
non-competition
provision described below. If Ms. Gugino materially breaches any provision of the Transition
Agreement or her employment is terminated by the Company prior to the Separation Date with cause, payment obligations to Ms. Gugino cease and she would be obligated to repay to the Company all moneys paid to her to which she would not otherwise
be entitled absent the Transition Agreement. Among the commitments entered into in the Transition Agreement, Ms. Gugino has agreed to post-employment
non-compete
and
non-solicitation
provisions through January 31, 2020, as well as a
non-disclosure
provision.
1
If Ms. Gugino is terminated for cause prior to the Separation Date, she has acknowledged and agreed that, despite being ineligible to receive the Severance Payment, she will nevertheless
remain bound by these and her other commitments contained in the Transition Agreement.
Mr. Goedken will continue to receive his annual base salary
of $198,395. He remains eligible to participate in the Companys employee benefit plans, subject to plan terms. He also will be eligible for a discretionary bonus in cash or equity at the end of his interim service.