Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
Departure of Chief Executive Officer and Chairman of the Board
On December 16, 2018 (the
Effective Date
), Mr. Joey A. Jacobs was removed from his positions as the Chief
Executive Officer (
CEO
) and Chairman of the Board of directors (the
Board
) of Acadia Healthcare Corporation, Inc., a Delaware corporation (the
Company
).
Election of new Director and Chief Executive Officer
Also on December 16, 2018, Ms. Debbie Osteen, 63, was elected by the Board to serve as the Companys CEO. Ms. Osteen
formerly led Universal Health Services, Incs Behavioral Health Division over nearly two decades and was responsible for its growth and operational success across both the U.S. and the U.K.
A copy of the press release announcing Ms. Osteens appointment and Mr. Jacobs removal is filed herewith as Exhibit 99.1
to this Form
8-K.
In connection with the appointment of Ms. Osteen as the Companys
CEO, on December 16, 2018 the Company entered into an employment agreement (the
Agreement
) with her that includes the following terms:
Term
. The term of the Agreement commences on the Effective Date and ends on December 31, 2020, subject to earlier termination in
accordance with the terms of the Agreement.
Annual Cash Compensation
. Ms. Osteens annual base salary will be $900,000
and her target annual bonus for each calendar year during her employment period with the Company will be 100% of her base salary. Ms. Osteens salary may be increased from time to time at the Companys discretion.
Annual Equity Awards
. For 2019, Ms. Osteen will be entitled to a long-term incentive award with a target value equal to not less
than $3.2 million. Thereafter, Ms. Osteen will be eligible to receive annual grants of equity or other long-term incentive awards in amounts as determined by the Compensation Committee of the Board.
Make Whole Payment
. To offset the value of compensation forfeited or forgone and compensate for other economic consequences of revoking
her separation agreement with her former employer and joining the Company, Ms. Osteen will receive a
one-time
cash
sign-on
bonus in the amount of $350,000, a
one-time
equity grant of restricted stock units with a grant date fair value that will not exceed $6.65 million that will vest ratably on the first two anniversaries of the Effective Date, and an additional
$2.5 million on the first anniversary of the Effective Date (subject to Ms. Osteens employment at such time).
Travel
and Relocation Expenses
. Ms. Osteen is required to permanently relocate to Nashville within the 12 months following the Effective Date. During the 12 months following the Effective Date (or, if earlier, Ms. Osteens permanent
relocation to Nashville), the Company will reimburse Ms. Osteen for rent and reasonable living expenses, up to an aggregate amount of $8,000 per month, and reimburse the executive for reasonable travel expenses. The Company will also reimburse
Ms. Osteen for relocation expenses, up to an aggregate amount of $225,000. The Company will also
gross-up
Ms. Osteen for associated taxes paid with respect to such reimbursements.
Benefits
. Ms. Osteen will be eligible to participate in arrangements for health, insurance and retirement benefits available to
other senior executives of the Company.
Termination Payments
. In the event that the Company terminates her employment without
cause or if she resigns her employment for good reason (each as defined in the Agreement), Ms. Osteen will be entitled to receive the following severance benefits, subject to Ms. Osteens timely execution and
non-revocation
of a general release of claims in favor of the Company: (i) accrued, but unpaid base salary, paid time off and sick pay, (ii) accrued by unpaid cash bonus with respect to a completed
performance period, (ii) an amount equal to the sum of her base salary and target bonus, each as in effect at the time of her termination, (iii) pro-rated annual bonus for the year of termination based on actual performance, and
(iv) Company payment of premiums for continued health and dental insurance premiums for 18 months following Ms. Osteens termination.
Restrictive Covenants
. Ms. Osteen will be subject to
non-competition,
non-solicitation
and
non-disparagement
covenants, during the term of her employment and for specified periods thereafter.