Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
On June 24, 2018, The Hain Celestial Group, Inc. (the
Company
)
and Irwin D. Simon entered into a Succession Agreement (the
Succession Agreement
), pursuant to which the parties agreed that, on the date immediately prior to the first date of employment of a new Chief Executive Officer of the
Company (the
Succession Date
), Mr. Simon will resign from his position as President and Chief Executive Officer of the Company, and from all other offices with the Company and its affiliates.
Prior to the Succession Date, Mr. Simons employment with the Company will continue to be subject to the terms and conditions set
forth in the Employment Agreement dated as of July 1, 2003, as amended through September 23, 2014, by any among Mr. Simon and the Company (as amended, the
Employment Agreement
). During such period, Mr. Simon
will be entitled to receive his Base Salary (as defined in the Employment Agreement) but will not be eligible to receive an annual bonus in respect of the Companys 2019 fiscal year nor will he be granted any long-term incentive awards from and
after the date of the Succession Agreement.
On the Succession Date, Mr. Simon will be entitled to the following payments and
benefits: (A) a cash separation payment equal to $34,294,688.00, payable in a single lump sum within ten (10) days following the Release Date (as hereinafter defined), (B) continuation of the certain life insurance and disability insurance
related benefits provided under the Employment Agreement until the third anniversary of the Succession Date, and (C) continuation of certain health benefits provided in the Employment Agreement in accordance with the terms thereof.
Upon the Succession Date, the long term incentive awards set forth on Exhibit B of the Succession Agreement (the
LTI
Awards
) shall be treated as follows: (X) all LTI Awards shall be deemed vested with respect to any service-based requirements to which such awards are then subject, and (Y) with respect to all LTI Awards that are subject to
performance-based vesting requirements, such awards shall remain subject to the applicable performance-based vesting requirements under the respective award agreements. The LTI Awards shall otherwise remain subject to the terms and conditions set
forth in the applicable award agreements.
Notwithstanding the foregoing, Mr. Simon is not entitled to receive any of the payments
described in the preceding two paragraphs unless he executes and delivers to the Company a Release of Claims attached as Exhibit A to the Succession Agreement (the
Release
) and does not revoke such Release within the time period
specified therein (the 8th day following the Succession Date, the
Release Date
). In the event that the Succession Date has not occurred by December 31, 2018, and Mr. Simon and the Board have not mutually agreed to the
continuation of his services as Chief Executive Officer of the Company, Mr. Simons employment will terminate as of such date and, subject to the terms and conditions set forth in the Succession Agreement, he will be entitled to the
payments and benefits described in the preceding two paragraphs. In the event that, prior to the Succession Date, Mr. Simons employment is terminated on account of death, Disability, Termination Without Cause, or Termination for Good
Reason (each as defined in the Employment Agreement), Mr. Simon shall be entitled to receive the payments and benefits set forth in the Succession Agreement, and the date of such termination shall be treated as the Succession Date. Upon any
termination of Mr. Simons employment prior to the Succession Date as a Termination For Cause (as defined in the Employment Agreement and modified in the Succession Agreement) or a Termination Not for Good Reason, Mr. Simon will not
be entitled to any succession payments or benefits described in the Succession Agreement (other than the Accrued Obligations (as hereinafter defined)).
Upon the Succession Date, Mr. Simon will be entitled to (A) the earned but unpaid base salary and accrued but unused vacation days,
payable in a single lump sum within ten (10) days following the Succession Date, in accordance with the Employment Agreement, (B) the Vested Benefits (as defined in the Employment Agreement), payable in accordance with the Employment
Agreement, and (C) settlement of any unreimbursed business expenses
in accordance with the requirements of Section 4(c) of the Employment Agreement (together, the
Accrued Obligations
).
From and after the Succession Date, Mr. Simon will continue to serve as a member of the Board of Directors of the Company (the
Board
) and shall become the
Non-Executive
Chairman of the Board for a
90-day
period (subject to extension by the mutual consent of Mr. Simon and
the Board), at which time Mr. Simon has agreed to resign from the Board. In addition to the regular compensation for a
non-employee
director of the Company generally, for his service as
Non-Executive
Chairman, Mr. Simon will be entitled to receive an annual cash retainer of $100,000, payable on a quarterly basis over his period of service in such role in accordance with the Companys
policy for the payment of Board retainer fees generally. Through the first anniversary of Mr. Simons service as
Non-Executive
Chairman, the Company will provide Mr. Simon with an administrative
assistant. The Company has agreed to pay Mr. Simons reasonable legal fees in connection with the negotiation of the Succession Agreement.
From and after the Succession Date, Mr. Simon will remain subject to certain restrictive covenants set forth in the Employment Agreement,
including with respect to
non-competitive
activities and confidentiality, as well as certain mutual
non-disparagement-related
covenants between Mr. Simon and the
Company set forth in the Succession Agreement.
The foregoing description of the Succession Agreement is not complete and is qualified in
its entirety by the terms and provisions of the Succession Agreement, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.