Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 31, 2019, the Company entered into an amendment (the “Amendment”) to the employment agreement with Gary Ferrera, the Company’s chief financial officer, dated as of November 16, 2017 (as amended, the “Employment Agreement”), to conform the terms of the separation payments to which Mr. Ferrera is entitled upon a termination of employment and the definition of “Change in Control” to the terms and definition applicable to the Company’s other executive officers. Capitalized terms used but not defined herein have such meanings as set forth in the Employment Agreement.
Following the Amendment, the Employment Agreement provides the following:
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If Mr. Ferrera’s employment is terminated due to death or disability, for Cause, or Mr. Ferrera’s voluntary resignation without Good Reason or election not to renew the agreement, he will be entitled to receive unpaid base salary, accrued but unused vacation, unreimbursed expenses (including incurred but unreimbursed relocation expenses unless he is terminated for Cause) and benefits to which Mr. Ferrera is entitled as of his termination.
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If Mr. Ferrera’s employment is terminated due to death, disability or Mr. Ferrera’s voluntary resignation without Good Reason, he is also entitled to receive his unpaid annual bonus for the year prior to termination and the pro-rated bonus for the year in which the termination occurs.
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If Mr. Ferrera’s employment is terminated due to death or disability, unless the applicable award agreement is more favorable, Mr. Ferrera will also be entitled to accelerated vesting of: time-based equity awards that would have vested in the 12 months following termination, a pro-rata amount of performance-based equity awards at target if the termination occurs during the performance period, the full amount of earned performance-based equity awards if termination occurs following the performance period and the unvested portion of Mr. Ferrera’s sign-on incentive stock award.
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If Mr. Ferrera’s employment is terminated due to his resignation for Good Reason or by action of the Company to terminate or not renew the Employment Agreement (other than for Cause), in addition to the payment of the unpaid Annual Bonus, the Annual Bonus for the year in which the termination occurs and two-times the sum of Mr. Ferrera’s base salary plus Average Annual Bonus and the availability of 18-months of COBRA coverage, Mr. Ferrera will also be entitled to, unless the applicable award agreement is more favorable, accelerated vesting of: any sign-on or one-time special equity awards, time-based equity awards that would have vested in the 12 months following termination, and, if the termination date is after the initial 12 month vesting period, but before the end of the performance period, a pro-rated amount of performance-based equity awards based on the actual level of performance through the termination date or, if the termination date is after the end of the performance period, the full amount of the earned award.
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If Mr. Ferrera’s employment is terminated due to his resignation for Good Reason or by action of the Company to terminate or not renew the Employment Agreement, in either case, within 24 months following a Change in Control, Mr. Ferrera will be entitled to receive, unless the applicable award agreement is more favorable accelerated vesting of sign-on or one-time special equity awards and time-based equity awards that would have vested in the 12 months immediately following the termination date, and, in respect of performance-based equity award, for a termination during the performance period, the equity awards are deemed earned at the greater of actual or target and any time-vesting conditions are satisfied as of termination and, for a termination following the end of a performance period, any awards that would have vested following the termination, fully vest as of the date of termination.
All separation payments not required by law are subject to the execution by Mr. Ferrera of an irrevocable release of claims in favor of the Company and related parties.
The foregoing summary is qualified in its entirety by the full text of the Employment Agreement.