Item 5.02
|
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
On November 30, 2017, the Company appointed Vincent Donargo as its Vice President and Chief Accounting Officer, effective immediately
.
Mr. Donargo, 57, previously served as Executive Vice President and Chief Financial Officer of Beaulieu Group LLC, a North American carpet and flooring manufacturing company, from August 2016 to November 2017. Prior to joining Beaulieu Group, he was at Brightstar Corp., a mobile services company, serving as Executive Vice President Finance Operations from August 2015 to August 2016 and as Executive Vice President and Chief Financial Officer from April 2014 to August 2015. Before his tenure at Brightstar, Mr. Donargo worked for Brightpoint, Inc., a publicly traded provider of worldwide distribution and integrated logistics services prior to its acquisition by Ingram Micro Inc., where he served as Chief Accounting Officer and Controller from September 2005 to May 2011 and as Chief Financial Officer and Treasurer from May 2011 to October 2012. Mr. Donargo also served as Executive Vice President, Integration, Financial Planning and Analysis, and Finance Transformation at Ingram Micro after Brightpoint's acquisition from October 2012 to April 2014. Mr. Donargo holds a B.A. in accounting from Rutgers University.
In connection with the appointment, the Company and Mr. Donargo entered into an employment agreement (the
“
Employment Agreement
”
), dated November 30, 2017, setting forth certain terms and conditions of Mr. Donargo’s employment with the Company. Under the Employment Agreement, Mr. Donargo will (i) have a base salary of $300,000; (ii) receive certain equity grants in connection with his appointment, the material 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 equity grants made to Mr. Donargo in connection with his appointment are as follows:
Grant Type / Number of Shares
|
|
Vesting Criteria / Exercise Terms
|
|
|
|
Restricted Stock – 25,000 shares
|
|
Shares
are fully vested at the commencement of Mr. Donargo’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. Donargo’s employment by the Company without Cause, (iii) Mr. Donargo terminating his employment for Good Reason within twelve months following a qualifying Change in Control, and (iv) Mr. Donargo’s death or disability.
|
Restricted Stock – 25,000 shares
|
|
Time vesting restricted stock, which will vest in eight equal quarterly installments beginning on the first day of the month following the second anniversary of the grant date.
|
Restricted Stock – 25,000 shares
|
|
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 closing price per share on November 30, 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.
|
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. Donargo and any other person pursuant to which Mr. Donargo was appointed Vice President and Chief Accounting Officer. There are no transactions in which Mr. Donargo has an interest requiring disclosure under Item 404(a) of Regulation S-K
other than the Employment Agreement.