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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Thom Albrecht Appointment and Employment Agreement
On October 16, 2017, the Company appointed
Thom Albrecht as its Executive Vice President, Chief Financial Officer, and Chief Strategy Officer, effective immediately.
Mr. Albrecht, 55, previously served as President of Sword & Sea Transport, LLC, a consulting company focusing on market research, growth strategies, and capacity overviews for freight transportation carriers and shippers. Prior to joining Sword & Sea Transport, he served as a Managing Director at BB&T Capital Markets from April 2000 to February 2005 and from July 2009 to July 2016. Mr. Albrecht’s coverage included truckload and less-than-truckload carriers, intermodal, selected equipment companies, freight brokerage, and freight forwarding. Before rejoining BB&T in 2009, Mr. Albrecht was a Managing Director at Stephens Inc. from February 2005 to July 2009, and has also followed the sector at ABN AMRO, Inc. and A.G. Edwards. Mr. Albrecht was designated a Chartered Financial Analyst and holds a B.S. in business administration with a Finance major from the University of Central Missouri. He is on the Federal Reserve Beige Book committee and the Advisory Board for TransRisk, a leading futures exchange for trucking linehaul rates.
In connection with the appointment, the Company and Mr. Albrecht entered into an employment agreement (the
“
Employment Agreement
”
), dated October 16, 2017, setting forth certain terms and conditions of Mr. Albrecht’s employment with the Company. Under the Employment Agreement, Mr. Albrecht will (i) have a base salary of $360,000; (ii) receive inducement awards in connection with his appointment, the terms of which are further described below; (iii) be eligible to participate in future equity grants under the Company’s long-term incentive program; (iv) be eligible to participate in the Company’s performance cash bonus program; (v) be entitled to up to $50,000 during the first year of employment as reimbursement for commuting costs, relocation expenses, and a housing allowance; (vi) be entitled to severance pay, if the Company terminates his employment without “Cause” or he terminates his employment for “Good Reason” (in either case, not involving a “Change in Control”), equal to eighteen months of salary continuation if such termination occurs during the first year of employment, or twelve months of salary continuation if such termination occurs after the first year of employment and COBRA continuation coverage for twelve months; (vii) be entitled to severance pay, if the Company terminates his employment without Cause or he terminates his employment for Good Reason, in either case, within six months prior to, or twelve months following, a Change in Control, equal to 150% of his annual base salary, 150% of the target amount of his annual cash bonus, COBRA continuation coverage for eighteen months, and accelerated vesting of equity awards to the extent so provided in the applicable award notices; and (viii) be subject to certain nonsolicitation, noncompetition, nondisparagement, and confidentiality covenants. The terms
“
Cause,
”
“
Good Reason,
”
and
“
Change in Control
”
are further defined in the Employment Agreement.
The inducement awards made to Mr. Albrecht in connection with his appointment are as follows:
Grant Type / Number of Shares
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Vesting Criteria / Exercise Terms
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Restricted Stock – 75,000 shares
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Shares
are fully vested at the commencement of Mr. Albrecht’s employment with the Company, but are subject to a holding period that will lapse upon the earliest to occur of (i) the second anniversary of the grant date, (ii) the termination of Mr. Albrecht’s employment by the Company without Cause, and (iii) Mr. Albrecht terminating his employment for Good Reason within twelve months following a qualifying Change in Control.
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Restricted Stock – 50,000 shares
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Time vesting restricted stock, which will vest in equal quarterly installments beginning on the second anniversary of the grant date, with all shares fully vesting on the fourth anniversary of the grant date.
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Restricted Stock – 50,000 shares
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Performance vesting shares of restricted stock, which will vest upon the earliest to occur of: (i) a sale of the Company at a price per share in excess of the price per share on October 16, 2017, (ii) a consolidated operating ratio for any fiscal year equal to or lower than 95%, and (iii) the closing price of the Company's common stock is $8.00 or greater for twenty consecutive trading days. Unvested shares will expire and be forfeited upon the earlier of (y) termination of employment and (z) five years after the date of issuance.
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Stock Options – 50,000 shares
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Non-qualified options to purchase common stock with an exercise price equal to the closing trading price on October 16, 2017. The options will vest in one-third installments on each of the second, third, and fourth anniversaries of the grant date.
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The foregoing summary of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreement, which will be filed with the Securities and Exchange Commission.
There is no arrangement or understanding between Mr. Albrecht and any other person pursuant to which Mr. Albrecht was appointed Executive Vice President, Chief Financial Officer, and Chief Strategy Officer. There are no transactions in which Mr. Albrecht has an interest requiring disclosure under Item 404(a) of Regulation S-K
other than the Employment Agreement.
Bobby Peavler Role Change
In connection with Mr. Albrecht’s appointment, and effective as of October 16, 2017,
Bobby Peavler will no longer be the Company’s Chief Financial Officer.
Mr. Peavler will continue to be a resource for the Company and the transition from Mr. Peavler to Mr. Albrecht was not a result of any disagreement between Mr. Peavler and the Company, its management, or the Board on any matter relating to the Company's operations, policies, or practices.