Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of
On May 8, 2019, Advance Auto Parts, Inc. (the “Company”) announced that
its Board of Directors (“Board”) has appointed Andrew E. Page to become
the Company's Senior Vice President, Controller and Chief Accounting
Officer (Principal Accounting Officer), effective May 13, 2019.
Prior to joining the Company, Mr. Page, 49, was employed by Under
Armour, Inc., which develops, markets and distributes branded
performance apparel, footwear and accessories. He joined Under Armour in
2011 as Assistant Controller and was named Senior Vice President and
Chief Accounting Officer in March 2019. Previously, Mr. Page served as
Assistant Controller for FTI Consulting, Inc., an independent global
business advisory firm, from 2008 to 2011; as Assistant Controller for
AES Corporation, Inc., an international electrical power generator and
distributor, from 2007 to 2008; as Assistant Controller – Consumer &
Industrial for General Electric, a multinational conglomerate, from 2006
to 2007; and as Controller for Discovery Communications, Inc. a mass
media company, from 2003 to 2006. Mr. Page also worked as an Audit
Manager with PricewaterhouseCoopers and is a certified public accountant.
In connection with his
appointment, Mr. Page and the Company have agreed to a compensation
arrangement, which has been approved by the Compensation Committee of
the Board (“Committee”). Pursuant to the compensation arrangement, Mr.
Page’s annual base salary is $385,000, and he is eligible to participate
in the Company's annual incentive bonus plan with a bonus target of 65
percent of base salary (“Target Bonus Amount”) and a maximum bonus
opportunity of 200 percent of the Target Bonus Amount, based on the
Company’s performance as measured against the same bonus criteria
applied to other senior executives of the Company. He will also receive
a one-time cash signing bonus in the amount of $150,000 payable within
30 days of his hire date and that he will be required to repay if he
voluntarily resigns his employment with the Company prior to completion
of two years of service.
Mr. Page is eligible to receive annual equity grants under the Company's
2014 Long-Term Incentive Plan (the “2014 LTIP”) consistent with the
Company’s compensation program for other executives of the Company. The
grant-date fair value of Mr. Page’s annual equity grant for the
2019-2021 performance cycle will be $400,000, with a grant-type mix
determined by the Committee and will be granted at the same time that
annual grants for the same cycle are made to other newly hired
executives. In addition, as soon as practicable following his
appointment, Mr. Page will receive a one-time grant of time-based
restricted stock units with a grant-date fair value of $750,000, which
will vest in three equal increments on the first, second and third
anniversaries of the grant date, and a one-time grant of time based
restricted stock units with a grant-date fair value of $100,000, which
will vest on the third anniversary of the grant date. Mr. Page will be
entitled to receive relocation benefits consistent with Company policy,
subject to adjustment as may be approved by the Committee.
In addition, Mr. Page and the Company have entered into an employment
agreement effective May 13, 2019, which provides for an initial one year
employment term. After the initial one-year term, Mr. Page’s agreement
is extended each day for an additional day until the Company provides at
least 90 days’ notice of its intention not to extend the agreement.
Upon termination of employment by the Company without Cause (not in
connection with a change in control) or upon termination of employment
by the Company without Cause within 12 months after a change in control,
Mr. Page would be entitled to:
Severance equal to one times the sum of (a) his base salary and (b)
an amount equal to the pro rata portion of any annual bonus that
would have been payable to him, provided that the criteria for such
bonus other than his continued employment have been satisfied;
Continued medical, dental and vision benefits for 52 weeks
post-termination at the same cost as active employees;
Outplacement assistance, at a cost to the Company not to exceed
$12,000, for a period of up to 12 months; and
Equity awards treated as set forth in the 2014 LTIP and the
applicable award agreements.
Any severance benefits paid would be subject to Mr. Page’s execution
(without revocation) of a general release of claims against the Company.
Pursuant to the terms of his employment agreement, Mr. Page is subject
to certain restrictive covenants, including the following, among others:
non-disclosure of confidential information; non-disparagement;
non-solicitation of customers, suppliers, employees, agents or
independent contractors, which runs for one year following his
termination of employment; and non-competition, which runs for one year
following his termination of employment.
The foregoing summary description of the material terms of Mr. Page’s
employment agreement does not purport to be complete and is qualified in
its entirety by the actual terms of the employment agreement, a copy of
which will be filed as an exhibit to the Company’s Quarterly Report on
Form 10-Q for the second quarter of 2019.
A press release announcing the appointment of Mr. Page was issued by the
Company on May 8, 2019 and is incorporated herein by reference.