Item 5.02 Departure of Directors or Certain Officers; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Departure of Certain Officers
In accordance with the resignation letter entered into by George G. Ellison and the Company, dated August 13, 2020, that was previously disclosed in the Company’s Current Report on Form 8-K filed on August 18, 2020, Mr. Ellison resigned as Co-Chief Executive Officer of AAMC. Following the resignation of Mr. Ellison, Indroneel Chatterjee remained as the sole Chief Executive Officer of AAMC.
In connection with the termination of the AMA, Robin N. Lowe resigned as Chief Financial Officer of AAMC and Mr. Lowe and the Company entered into a resignation letter agreement (the “Lowe Resignation Agreement”). Pursuant to the terms of the Lowe Resignation Agreement, Mr. Lowe resigned as an officer and employee of the Company effective at the close of business on December 31, 2020. The Lowe Resignation Agreement also contains mutual releases by the Company and Mr. Lowe for all claims, known or unknown, for acts occurring prior to the date of the Lowe Resignation Agreement and Mr. Lowe agreed to abide by confidentiality and non-disparagement covenants contained in the Lowe Resignation Agreement.
Also, in connection with the termination of the AMA, Stephen H. Gray resigned as General Counsel and Secretary of AAMC. Pursuant to his resignation letter, Mr. Gray resigned as an officer and employee of the Company effective at the close of business on December 31, 2020.
The resignations of Messrs. Lowe and Gray were in connection with the termination of the AMA and, to the knowledge of the Company’s executive officers, were not the result of any disagreement with the Company.
The foregoing description of the Lowe Resignation Agreement does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of the Lowe Resignation Agreement, which is filed as Exhibit 10.1, and is incorporated herein by reference.
Appointment of Certain Officers
The Board of Directors of AAMC (the “Board”) promoted Chris Moltke-Hansen to Chief Financial Officer effective January 1, 2021 and designated him as the Company’s principal financial officer and principal accounting officer. Mr. Moltke-Hansen, age 34, joined the Company in 2018 and was subsequently promoted to Managing Director of Finance in October 2020. In his previous positions with the Company, Mr. Moltke-Hansen was responsible for managing the Company’s financial and SEC reporting and the accounting policies of the Company and its primary client, Front Yard. Prior to joining AAMC in 2018, Mr. Moltke-Hansen was Vice President of Financial Control at Credit Suisse, a leading global wealth manager and investment bank, which he joined in 2011 and where he held various positions of increasing responsibility. In his roles at Credit Suisse, Mr. Moltke-Hansen worked extensively across the bank to support the financial, operational, regulatory, and compliance aspects of the bank’s U.S. parent company and subsidiaries. Mr. Moltke-Hansen began his career in the audit practice of a BDO Alliance USA firm. Mr. Moltke-Hansen is a Certified Public Accountant and holds a Bachelor of Science in Accounting from Elon University.
Pursuant to the terms of an amended and restated employment agreement by and between the Company and Mr. Moltke-Hansen (the “Employment Agreement”) that was entered into effective as of January 1, 2020, Mr. Moltke-Hansen will receive an annual base salary of $250,000.00 and an annual cash incentive bonus target of $225,000.00, with the maximum payout opportunity of 200% of this base salary based on the achievement of annual performance targets to be established by the Board or the Compensation Committee of the Board. In addition, Mr. Moltke-Hansen is eligible to receive equity awards under the Company’s equity incentive plan(s). Mr. Moltke-Hansen received a one-time cash inducement award of $250,000.00 on October 15th, 2020 (the “Payment Date”), subject to an obligation to repay 100% of such inducement award if terminated by the Company for “Cause” (as defined in the Employment Agreement) or resignation by Mr. Moltke-Hansen without “Good Reason” (as defined in the Employment Agreement) within the first year following the Payment Date or 50% of such signing award if terminated by the Company for “Cause” or resignation by Mr. Moltke-Hansen without “Good Reason” during the second year following the Payment Date.
Mr. Moltke-Hansen will also receive an initial equity award of 5,000 restricted shares, which will be made under the Company’s 2020 Equity Incentive Plan (the “Plan”) and subject to the terms and conditions of the Plan. The restricted shares will vest annually over a three year period on the first three anniversaries of October 15, 2020.
The Employment Agreement also provides that if the Company terminates Mr. Moltke-Hansen’s employment for a reason other than “Cause,” his death or his “Disability,” or he resigns for “Good Reason” (each as defined in the Employment Agreement) he would be entitled to: (i) 50% of the sum of his annual base salary and target bonus; (ii) 100% of his prorated annual bonus based on his prior year annual bonus; (iii) vesting acceleration of 100% of the unvested portion of his then-outstanding equity awards (except as prohibited by the Plan); (iv) Company-reimbursed COBRA continuation coverage for up to six months, and (v) any other accrued and unpaid amounts due to him by the Company. The severance benefits will be subject to execution of a customary release, providing, among other things, confirmation of his confidentiality, non-disparagement and non-solicitation obligations.
There are no arrangements or understandings between Mr. Moltke-Hansen and any other person pursuant to which he was selected as an officer of the Company. There are no family relationships between Mr. Moltke-Hansen and any director or executive officer of the Company nor is Mr. Moltke-Hansen party to any related person transactions, in each case as required to be disclosed under Item 401 or 404 of Regulation S-K.
The foregoing description of the Employment Agreement is not complete and is qualified in its entirety by reference to the full text of the Employment Agreement, which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.