ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN
OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
(b) Departure of Principal Operating Officer
On June 11, 2018, Ronald Shiftan, the Vice Chairman of the Board of Directors (the “
Board
”) and Chief Operating Officer of Lifetime
Brands, Inc. (the “
Company
”), informed the Company of his retirement as an officer of the Company, effective March 15, 2019 (the “
Retirement Date
”).
(e) Compensatory Arrangements of Principal Operating Officer
In connection with his retirement, the Company and Mr. Shiftan entered into a Retirement Agreement (the “
Retirement Agreement
”) setting
forth the terms of his continued employment through the Retirement Date. Prior to the Retirement Date, the Company and Mr. Shiftan agreed that neither will terminate Mr. Shiftan’s employment pursuant to the Third Amended and Restated
Employment Agreement by and between the Company and Mr. Shiftan, dated as of November 24, 2015, including amendments through November 8, 2017 (the “
Employment Agreement
”), except by the Company for cause, by
Mr. Shiftan for good reason, by either of them on account of disability, or by reason of Mr. Shiftan’s death.
During the period from
June 11, 2018 through the Retirement Date (the “
Transition Period
”), Mr. Shiftan will continue to perform such duties as may be assigned to him by the Company’s Chief Executive Officer, provided that during the period
from January 1, 2019 through the Retirement Date, his time commitment will be reduced to 50% of what it had been over the prior 36 months.
Unless
his employment is terminated as described above, through the Retirement Date, Mr. Shiftan will remain Vice Chairman of the Board (subject to
re-election
to the Board at the Company’s 2018 Annual
Meeting of Stockholders scheduled to be held on June 28, 2018) and Chief Operating Officer, and will continue to be entitled to receive his base salary and expense reimbursement, automobile, vacation, pension, insurance and other benefits
provided pursuant to the Employment Agreement and continued vesting of his previously granted equity awards. The Company will continue to pay him 100% of his base salary pursuant to the Employment Agreement through December 31, 2018, and then
for the remainder of the Transition Period will pay him at the rate of 50% of such base salary. His 2018 bonus eligibility will be determined and paid in accordance with the Employment Agreement, provided that he will not be entitled to any other
bonus compensation, including in respect of the portion of the year that he works in 2019.
On or following the Retirement Date, as long as
Mr. Shiftan remains employed by the Company until the Retirement Date, (i) his unvested time-based equity awards will vest, (ii) his performance-based equity awards will vest to the extent that the applicable performance goals were
obtained and
pro-rated
for the portion of the performance period ending on the Retirement Date, (iii) he will receive a lump sum payment equal to the sum of (a) $650,000 and (b) the average of the
bonuses paid to him pursuant to the Employment Agreement for each of 2016, 2017 and 2018, (iv) he will receive reimbursement of up to six months of rental payments on an apartment that he maintains near the Company’s principal offices, and
(v) he will be permitted to serve out the remainder of his term as a member of the Board (subject to the Board’s right to remove him for cause), in each case upon the effectiveness of a customary release executed by him on or after the
Retirement Date but no later than April 22, 2019.
Following the Retirement Date, Mr. Shiftan will remain subject to the
non-competition
and
non-solicitation
obligations set forth in the Employment Agreement.
The foregoing description is qualified in its entirety by the Retirement Agreement, which is filed as Exhibit 10.1 hereto and hereby incorporated by reference
herein.
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