Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Chief Financial Officer
On August 10, 2020, the Board of Directors (the “Board”) of Calumet GP, LLC (the “Company”), the general partner of Calumet Specialty Products Partners, L.P. (the “Partnership”), appointed Louis Todd Borgmann to serve as the Company’s Senior Vice President & Interim Chief Financial Officer, effective September 1, 2020. Mr. Borgmann currently serves as the Company’s Vice President Supply & Trading and will assume the role as the Company’s Senior Vice President & Interim Chief Financial Officer on September 1, 2020.
Prior to his role as Vice President, Supply & Trading, Mr. Borgmann, age 37, served as the Company’s Vice President, Business Development from January 2014 to May 2016.
Mr. Borgmann and the Company entered into a Promotion Letter dated August 10, 2020 (the “Borgmann Offer Letter”). The Borgmann Offer Letter states that Mr. Borgmann will receive an annual base salary of $325,000. Mr. Borgmann will be eligible to participate in the Company’s annual bonus plan with a target bonus equal to 150% of his annual base salary, with a potential range from 50% to 200% of annual base salary, although the receipt of any portion of the bonus award will be subject to the satisfaction of all individual, financial or Company performance metrics imposed upon the bonus award. In the event that Mr. Borgmann earns a bonus award pursuant to this plan, settlement will occur 50% in cash and 50% in the form of fully-vested phantom units granted pursuant to the Company’s equity compensation plan, which will be delivered to Mr. Borgmann on the fourth anniversary of the grant date. Beginning January 2021, Mr. Borgmann will also be eligible to receive annual equity compensation awards pursuant to the Company’s equity compensation plan, with an annual target value equal to 60% of his annual base salary. Any such annual equity compensation awards will generally be granted following the Company’s achievement of pre-determined performance metrics, and then will be eligible to cliff vest at the end of a three (3) year period. Mr. Borgmann will also be eligible to participate in all Company health and welfare benefits, retirement plans and other programs that are available to similarly situated Company employees.
There is no arrangement or understanding between Mr. Borgmann and any other person(s) pursuant to which he was selected to be an officer of the Company, and Mr. Borgmann does not have any family relationships with any of the Company’s executive officers or directors.
Appointment of Chief Accounting Officer and Principal Accounting Officer
On August 10, 2020, the Board of the Company appointed Vincent Donargo as the Company’s Chief Accounting Officer and, effective September 1, 2020, the Company’s principal accounting officer. Mr. Donargo, age 59, has served as the interim Chief Accounting Officer of Company since June 22, 2020. In addition, Mr. Donargo also serves as the Chief Financial Officer of Novus Capital Corporation, a special purpose acquisition corporation. He has held that role since March 5, 2020. Prior to joining the Company, Mr. Donargo served as the Chief Accounting Officer of Celadon Group Inc. from November 2017 to May 2020, Executive Vice President, Chief Financial Officer and Treasurer of Beaulieu Group LLC from August 2016 to November 2017 and Executive Vice President Finance Operations at Brightstar Corp from August 2015 to August 2016.
Mr. Donargo and the Company entered into an Offer Letter of Employment dated August 7, 2020 (the “Donargo Offer Letter”). Mr. Donargo will receive a base salary of $325,000 per annum and is eligible to earn an annual performance bonus with a potential range from 25% to 75% of his then current base salary based on the Partnership achieving certain financial goals. Mr. Donargo received a one-time equity grant of 10,000 phantom units pursuant to the Company’s equity compensation plan that will vest on the third anniversary of his employment with the Company. Mr. Donargo will also be eligible to receive annual equity compensation awards pursuant to the Company’s equity compensation plan, with an annual target value equal to 40% of his annual base salary. Any such annual equity compensation awards will generally be granted following the Company’s achievement of pre-determined performance metrics, and then will be eligible to cliff vest at the end of a three (3) year period. Mr. Donargo will also be eligible to participate in all Company health and welfare benefits, retirement plans and other programs that are available to similarly situated Company employees.
In the event that the Company terminates his employment without cause within the one year period following the beginning of his employment and Mr. Donargo signs a customary severance and release agreement in the Company’s favor, Mr. Donargo will also be entitled to receive a severance payment in the amount of $158,100.
There are no arrangements or understandings between Mr. Donargo and any other person pursuant to which he was appointed as principal accounting officer of the Company, and there are no family relationships among Mr. Donargo and any directors or officers of the Company. There have been no transactions nor are there any proposed transactions between the Company and Mr. Donargo that would require disclosure pursuant to Item 404(a) of Regulation S-K.
The foregoing descriptions of the Borgmann Offer Letter and the Donargo Offer Letter are not complete and are qualified in their entirety by reference to the complete text of such agreements, which will be filed as exhibits to the Partnership’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.