Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 28, 2020, the Company announced that the Board of Directors of the Company (the “Board”) has appointed Charles E. Tyson as President and Chief Executive Officer and as a member of the Board effective May 27, 2020. Mr. Tyson, age 58, has served as the Company’s Interim President and Principal Executive Officer since February 5, 2020 and as Chief Customer Experience Officer since June 2018. Prior to joining the Company, from 2008 to 2017, Mr. Tyson held various roles at Advance Auto Parts, Inc., including Executive Vice President, Merchandising, Marketing and Supply Chain from 2013 to 2017 and Senior Vice President, Merchandising, Replenishment and Marketing from 2011 to 2013.
Mr. Tyson will be entitled to receive an annual base salary of $700,000, subject to the previously disclosed 25% salary reduction currently in place, and an annual bonus target of 100% of his base salary. In addition, Mr. Tyson will receive a $550,000 supplemental equity award, 25% of which will be in the form of stock options, 25% of which will be in the form of time-based restricted stock units that vest ratably over four years and 50% of which will be in the form of performance stock units, in each case pursuant to the terms of our Amended and Restated 2011 Equity Compensation Plan.
In addition, the Company and Mr. Tyson entered into a Severance Agreement. The terms of the Severance Agreement are substantially similar to the terms of the severance agreements entered into by the Company and certain officers of the Company on July 26, 2018 and described in Item 5.02 of the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 28, 2018, which description is incorporated herein by reference. This description does not purport to be complete and is qualified in its entirety by reference to the full text of the Severance Agreement, which is attached as Exhibit 10.1 to this report and is incorporated by reference into this Item 5.02. Additionally, Mr. Tyson has agreed that the temporary reduction in his base salary does not constitute “Good Reason” (an event that could permit such officer to resign and receive severance) under his severance agreement with the Company.
There are no arrangements or understandings between Mr. Tyson and any other persons, pursuant to which Mr. Tyson was selected as a director. Mr. Tyson has no family relationship with any director or executive officer of the Company, and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
In connection with Mr. Tyson’s appointment, the previously disclosed interim compensation arrangements with Mr. Tyson and Nancy A. Walsh, the Company’s Chief Financial Officer, have been terminated. In addition, the Board approved an increase to Ms. Walsh’s base salary to $515,000, subject to the previously disclosed 25% salary reduction currently in place, and a $125,000 grant of restricted stock that vests ratably over four years. Additionally, the Severance Agreement between the Company and Ms. Walsh was amended to provide that the temporary reduction in base salary would not constitute “Good Reason.”
On May 27, 2020, M. Lee Reeves, the Senior Vice President, Chief Legal Officer and Corporate Secretary of the Company, resigned from the Company to pursue other opportunities.