Item 1.01. Entry into a Material Definitive Agreement.
On November 18, 2021, the Board of Directors (the “Board”) of
Turtle Beach Corporation (the “Company”) approved the Company’s
Amended and Restated Retention Plan (the “Amended Plan”), which is
intended to align those severance benefits to those offered to
other executive team employees by peer companies and best practice
based on a peer review and assessment report prepared by Compensia,
Inc., an executive compensation consulting firm, for the
Compensation Committee, and replaces the prior retention plan.
Participation in the Amended Plan is open to any employee of the
Company who is designated by the Board as being covered by the
Amended Plan.
The Amended Plan provides that if a participant is terminated by
the Company without Cause or a participant terminates his or her
employment for Good Reason (as those terms are defined in the
Amended Plan) during the one-year period following a Change in
Control, then, subject to the participant’s execution and
non-revocation of a general release, the participant will be
entitled to: (i) payment of any portion of the participant’s annual
bonus under the Company’s Management Incentive Plan for the
calendar year prior to the one in which the Transaction Date occurs
that has not been paid prior to the participant’s termination date;
(ii) a lump-sum payment equal to the participant’s Target Bonus for
the year of termination multiplied by (x) the greater of 50% or the
percentage of such year that the participant was employed by the
Company, or (y) 100% if the participant is further designated by
the Board as an “extended participant”; (iii) continuation of the
participant’s Base Pay for six (6) months (or twelve (12) months if
an extended participant) from the termination date of the
participant’s employment in accordance with the Company’s ordinary
payroll practices; (iv) if the participant elects coverage under
COBRA, reimbursement for the full amount of premiums for such
continuation coverage for a period of six (6) months (or twelve
(12) months if an extended participant); provided, that, if a
participant is entitled to severance benefits under such
participant’s employment agreement, then the participant will only
be entitled to the larger benefit for each of the items above as
between the severance benefits in such employment agreement and
under the Amended Plan, but not both.
The Amended Plan defines “Changes in Control” as any of the
following events occurring after the date of the Amended Plan: (a)
a “person” (as such term in used in Sections 13(d) and 14(d) of the
Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 50% or
more of the combined voting power of the Company’s then outstanding
securities; (b) the Company merges or consolidates with any other
corporation, other than in a merger or consolidation that would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) directly or indirectly, at least 50% of
the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such merger
or consolidation; or (c) the sale or other disposition of all or
substantially all of the Company’s assets. Notwithstanding
anything in the Amended Plan to the contrary, no event that would
be a Change in Control as defined in the Amended Plan shall be a
Change in Control unless such event also constitutes a “change in
control event” as defined in Section 409A of the Internal Revenue
Code of 1986, as amended, and its corresponding regulations.
The foregoing description of the Amended Plan is qualified in its
entirety by reference to the Amended Plan, which is filed herewith
as Exhibit 10.1 and incorporated herein by reference.
Item 5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
The information included in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 5.02.
On November 19, 2021, the Company entered into a letter agreement
(the “Letter Agreement”), with John Hanson, the Company’s Chief
Financial Officer, to grant Mr. Hanson participation in the Amended
Plan as an extended participant. Accordingly, the Letter Agreement
provides that if Mr. Hanson’s employment is terminated by the
Company without Cause or if Mr. Hanson terminates his employment
for Good Reason (as those terms are defined in the Amended Plan)
during the one-year period following a Change in Control, then,
subject to his execution and non-revocation of a general release,
Mr. Hanson will be entitled to: (i) payment of any portion of his
annual bonus under the Company’s Management Incentive Plan for the
calendar year prior to the one in which the Transaction Date occurs
that has not been paid prior to his termination date; (ii) a
lump-sum payment equal his Target Bonus for the year of
termination; (iii) continuation of his Base Pay for twelve (12)
from the termination date of his employment in accordance with the
Company’s ordinary payroll practices; (iv) if he elects coverage
under COBRA, reimbursement for the full amount of premiums for such
continuation coverage for a period of twelve (12) months; provided,
that, if he is entitled to severance benefits under his employment
agreement, then he will only be entitled to the larger benefit for
each of the items above as between the severance benefits in such
employment agreement and under the Amended Plan, but not
both.
The foregoing description of the Letter Agreement does not purport
to be complete and is subject to, and qualified in its entirety by
reference to, the full text of the Letter Agreement, a copy of
which is attached hereto as Exhibit 10.2 and incorporated herein by
reference.
Item 9.01 — Financial Statements and Exhibits
(d) Exhibits
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Exhibit
No.
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Description
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL
document) |