Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b), (c) & (e)
On September 8, 2021, APi Group Corporation (the “Company”) announced that Thomas A. Lydon will no longer serve as the Company’s Chief Financial Officer, effective as of September 7, 2021, but will remain with the Company for a transition period ending December 31, 2021. The Company also announced that Kevin Krumm, 47, will serve as the Company’s new Chief Financial Officer, effective as of September 20, 2021. Prior to joining the Company, Mr. Krumm served as Corporate Treasurer and Senior Vice President of Finance Shared Services since December 2019. Prior to that, Mr. Krumm held roles of increasing responsibility within Ecolab since he re-joined Ecolab in April 2010, including leading the Industrial segment finance team; leading regional finance teams in Europe, Middle East and Africa, Asia and Latin America; and leading international integration efforts for a major acquisition. Mr. Krumm previously held other finance roles at Ecolab from 2004 to 2008. He also previously held finance roles at UnitedHealth Group from 2009 to 2010 and Minnetronix from 2008 to 2009, and began his career in public accounting.
Mr. Lydon and the Company entered into a Separation Agreement, dated September 7, 2021 (the “Separation Agreement”), pursuant to which Mr. Lydon is entitled to (i) continuation of Mr. Lydon’s annual salary of $825,000 for a period of 24 months, (ii) payment of $1,650,000, which is equal to two times Mr. Lydon’s target bonus amount, payable in two annual installments, and (iii) payment of $825,000, which is equal to Mr. Lydon’s target bonus amount applicable for 2021, payable when 2021 annual bonuses would be paid to employees generally. Also pursuant to the Separation Agreement, Mr. Lydon agreed to continue to serve as an employee for a transition period ending December 31, 2021 and to a customary release of claims.
The foregoing summary of the Separation Agreement is qualified in its entirety by reference to the full text of the Separation Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
In connection with his appointment as Chief Financial Officer, Mr. Krumm and the Company entered into an Employment Agreement, dated September 1, 2021 (the “Employment Agreement”), pursuant to which Mr. Krumm will be entitled to (i) an annual base salary of $750,000, (ii) an annual cash incentive with a target opportunity equal to 100% of his annual base salary and a maximum opportunity equal to 200% of his annual base salary, (iii) an annual long-term equity incentive award having a grant date value of not less than 250% of his annual base salary, (iv) an initial long-term equity incentive award in the form of restricted stock units with a grant date value of $1,250,000 which will vest in three equal annual installments and (v) participate in the Company’s employee benefits plans.
Also pursuant to the Employment Agreement, if the Company terminates Mr. Krumm’s employment without cause or if Mr. Krumm terminates his employment for good reason, Mr. Krumm would be entitled to receive (i) his base salary for two years from the date of termination, (ii) an amount equal to two times his target annual bonus, payable in two annual installments, (iii) his pro-rata annual bonus for the year in which the termination occurs, (iv) any earned and accrued but unpaid base salary up to the date of termination, (v) any unpaid annual bonus with respect to any completed fiscal year, (vi) his vested employee benefits and (vii) continued insurance coverage for 18 months following the date of termination. Mr. Krumm would not be entitled to any unearned salary, bonus or other benefits if the Company were to terminate his employment for cause or if Mr. Krumm were to terminate his employment voluntarily without good reason. If the Company should terminate Mr. Krumm’s employment without cause or if Mr. Krumm terminates his employment for good reason during the two-year period immediately following a “change in control,” as defined in the Employment Agreement, then in lieu of any amounts otherwise payable, Mr. Krumm would be entitled to receive (i) all earned and accrued but unpaid base salary and annual bonus amounts up to the date of termination, (ii) an amount equal to two times his base salary, (iii) an amount equal to two times his target annual bonus, (iv) continued insurance coverage for 18 months following the date of termination, (v) full and immediate vesting of all outstanding long-term incentive awards, (vi) reasonable legal fees and related expenses as a result of the termination and (vii) outplacement counseling. Mr. Krumm also agreed to non-competition, confidentiality and non-solicitation covenants.
The foregoing summary of the Employment Agreement is qualified in its entirety by reference to the full text of the Employment Agreement, a copy of which is filed as Exhibit 10.2 hereto and incorporated herein by reference.