Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
In connection with Robert Radie’s resignation as President and Chief Executive Officer of the Company effective as of October 22, 2019, the Company and Mr. Radie agreed on the terms of Mr. Radie’s separation on October 30, 2019. Mr. Radie will continue with the Company as its principal financial officer for a transition period until his separation date of December 31, 2019. In consideration of his release of claims against the Company, for a twelve month period following his separation date, he will be entitled to (1) salary continuation in the aggregate amount of $580,000 and (2) reimbursement of COBRA premiums necessary to continue his health insurance coverage (including eligible dependent coverage, if any) or, if he and his eligible dependents cease to be eligible for COBRA coverage during this period, reimbursement for the reasonable premium cost of private health insurance coverage. In addition, upon the separation date, the vesting of 66,000 time-based restricted stock units and 66,000 performance-based restricted stock units held by Mr. Radie will accelerate, and he will be entitled to receive one share of the Company’s common stock in settlement of each such unit (subject to, at Mr. Radie’s election, reduction to satisfy applicable tax withholding). Any and all other unvested equity awards held by him will be forfeited upon his separation from the Company.
The foregoing summary is not intended to be complete and is qualified in its entirety by Mr. Radie’s separation agreement with the Company a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
In connection with Todd N. Smith’s election as President and Chief Executive Officer by the Board of Directors of the Company, the Company and Mr. Smith entered into an employment agreement effective as of October 23, 2019 (the “Employment Agreement”) on October 30, 2019. Under the terms of his employment, Mr. Smith will serve as the Company’s President and Chief Executive Officer, as well as in any other position to which he is appointed by the Company’s Board of Directors, on an at will basis, during which time he is entitled to the following compensation and benefits: (1) an annual base salary in the amount of $600,000; (2) eligibility for an annual bonus (pro-rated for the first fiscal year of the term) with a target amount equal to 60% of his base salary.
Upon Mr. Smith’s separation from service by the Company without cause or by him for good reason, he will be entitled to receive any earned but unpaid annual bonus, if any, for the year immediately preceding the year of termination as well as base salary continuation and continued medical coverage for twelve months. As a condition to receiving the severance benefits described in this paragraph, Mr. Smith is required to execute a general release and adhere to a twelve-month post-termination noncompetition and nonsolicit and nonhire restrictions, and a perpetual confidentiality obligation.
In addition, upon Mr. Smith’s death or disability, Mr. Smith’s employment will immediately terminate, and he will be entitled to accrued and unpaid base salary, accrued and unpaid vacation, reimbursement of expenses to which he is entitled under his employment agreement and any earned but unpaid bonus for the year prior to the year of termination. Upon Mr. Smith’s separation from service by the Company without cause or by him for good reason within 24 months after a change in control of the Company. Mr. Smith will be entitled to the above described benefits for a period of 24 months. Upon any such termination of employment, Mr. Smith will be deemed to have immediately resigned from any and all officer, director and other positions he then holds with the Company and its affiliates.
The foregoing summary is not intended to be complete and is qualified in its entirety by Mr. Smith’s employment agreement with the Company, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K.
In addition, on October 23, 2019, Mr. Smith received a one-time grant of 200,000 restricted stock units, vesting ratably over three years from the date of grant, subject to his continued employment with the Company through each applicable vesting date.
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