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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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Resignation of Chief Financial Officer
On August 5, 2019,
Herbert M. Mueller
submitted his
resignation from his position as Executive Vice-President and Chief
Financial Officer the Company, and as a member of the Board of Directors of any of the Company’s subsidiaries or affiliates, effective as of August 23, 2019 (the “Separation Date”). Following his resignation as CFO, he may enter
into a Consulting Agreement to provide services to the Company on a reduced basis from his home base in Georgia.
In connection with
Mr. Mueller’s resignation, the Company and Mr. Mueller entered into a Severance and General Release Agreement (the “Severance Agreement”). Under the terms of the Severance Agreement, the Company has agreed to pay
Mr. Mueller a lump sum payment equal to two years of base salary and allow Mr. Mueller to remain eligible for continued participation in the Company’s group health insurance plans at his current benefit elections at the Company’s
expense until the earlier of (i) the expiration of twenty-four months from the Separation Date or (ii) Mr. Mueller’s eligibility for participation in the group health plan of a subsequent employer. Mr. Mueller will be
subject to certain restrictive covenants set forth in Section 13 of the Employment Agreement between Mr. Mueller and the Company, dated August 29, 2016, for a period of twenty-four (24) months after the Separation Date. The
Severance Agreement also contains an indefinite confidentiality clause and
non-disparagement
clause. The foregoing description of the Severance Agreement is qualified in its entirety by reference to the
complete terms and conditions of such Severance Agreement included as Exhibit 10.1 to this report.
In accordance with applicable law, Mr. Mueller
may revoke the Severance Agreement at any time during the seven days following the execution of the Severance Agreement, in which case he will not be entitled to the payments provided in the Severance Agreement.
Appointment of Interim Chief Financial Officer
Effective
upon Mr. Mueller’s departure, Ms. Jennifer Ryu, age 44, currently the Company’s Senior Vice President of Finance and Accounting, will be named Interim Chief Financial Officer and assume the responsibilities of the Company’s
principal financial officer and principal accounting officer. Ms. Ryu will report to the Company’s Chief Executive Officer.
Ms. Ryu joined
the Company in April 2019 from Young’s Holdings, a privately-owned distributor and importer of wine and spirits, where she held the position of Chief Accounting Officer. During her five years with the company, Ms. Ryu led all
technical and general accounting functions and partnered with the business on several transformational initiatives, including the design and implementation of a new ERP system. Prior to joining Young’s Holdings, Ms. Ryu spent seven
years with Kaiser Aluminum, a $1B producer of semi-fabricated aluminum products. As their Director of External Reporting, she led all aspects of corporate
month-end
close, financial consolidation and analysis,
technical accounting, SEC and other external reporting functions. Ms. Ryu began her career in public accounting at Deloitte. Ms. Ryu is a CPA and holds a B.A. in Business Economics and Accounting from University of California, Los
Angeles.
Pursuant to the terms of an offer letter between Ms. Ryu and the Company, Ms. Ryu will receive an annual base salary of $325,000 and
be eligible to participate in the Company’s Executive Incentive Plan with a target incentive amount of 75% of her base salary. Ms. Ryu has not been granted any equity awards as part of her promotion, but remains eligible to participate in
the Company’s annual equity award program.
The foregoing description of the agreement is qualified in its entirety by reference to the complete
terms and conditions of such offer letter included as Exhibit 10.2 to this report.
In addition, in connection with Ms. Ryu’s appointment as
Interim Chief Financial Officer, the Company and Ms. Ryu will also enter into the Company’s standard form of indemnification agreement, a copy of which has been filed as Exhibit 10.26 to the Company’s Annual Report on Form
10-K
for the year ended May 31, 2008 filed with the Securities and Exchange Commission on July 30, 2008.
Ms. Ryu has no family relationships with any of the Company’s directors or executive officers. There is no arrangement or understanding between
Ms. Ryu and any other persons pursuant to which Ms. Ryu was selected as an officer of the Company, and Ms. Ryu has no direct or indirect material interest in any other transaction required to be disclosed pursuant to Item 404(a) of
Regulation
S-K.