Item 5.02. |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
CEO Employment Agreement
On March 1, 2022, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Offerpad Solutions Inc. (the “Company”) approved, and the Company entered into, an employment agreement with Brian Bair (the “Employment Agreement”). Mr. Bair currently serves as the Company’s Chief Executive Officer under the prior offer letter between the Company and Mr. Bair, dated as of August 5, 2016 (the “Prior Offer Letter”). The Employment Agreement provides for Mr. Bair’s continued employment with the Company as the Company’s Chief Executive Officer, and supersedes and replaces the Prior Offer Letter in its entirety. The material terms and conditions of the Employment Agreement are summarized below.
The term of employment under the Employment Agreement is for three years, and will automatically renew for successive one-year periods, unless either party provides at least 45 days of advance written notice of the party’s intention not to renew the then-current term. Pursuant to the Employment Agreement, Mr. Bair is entitled to receive an annual base salary of $650,000 per year, pro-rated for partial years of employment and subject to annual review and increase by the Board or a subcommittee thereof in its discretion. In addition, Mr. Bair is eligible to participate in the health and welfare benefit plans and programs maintained by us for the benefit of our employees, as well as the paid-time-off programs maintained by us for the benefit of our executives generally.
Mr. Bair is eligible to earn annual cash performance bonuses, based on the achievement of individual and/or Company performance goals established by the Board and targeted at 100% of his then-current annual base salary. The payment of any annual bonus, to the extent any such bonus becomes payable, will be made no later than March 15 of the calendar year following the calendar year for which the Board certifies in writing that performance goals have been met; any such payment will be contingent upon Mr. Bair’s continued employment through the last day of the applicable calendar year.
In connection with entering into the Employment Agreement, Mr. Bair was granted two restricted stock unit awards under the Company’s 2021 Incentive Award Plan (the “2021 Plan”), with an aggregate dollar-denominated value targeted at approximately $6,000,000. Of such amount, (x) 25% was granted as a time-based Restricted Stock Unit award that vests based solely on the passage of time (the “Initial RSU Award”) and (y) the remaining 75% was granted as a performance-based Restricted Stock Unit award that vests based on the achievement of specified performance goals (the “Initial PSU Award” and, together with the Initial RSU Award, the “Initial Awards”). The material terms and conditions of the Initial Awards are described below in the section titled, “Equity Awards under 2021 Plan.”
In addition to the Initial Awards, for each calendar year during Mr. Bair’s employment term beginning with calendar year 2023, Mr. Bair will be eligible to receive an annual equity-based compensation award as determined by the Board (or a subcommittee thereof) from time to time. The target aggregate value of any such award will be (i) $6,000,000 for calendar year 2023 and (ii) determined by the Board (or a subcommittee thereof) for each calendar year following 2023.
Under the Employment Agreement, on a termination of Mr. Bair’s employment by the Company without “Cause” or by Mr. Bair for “Good Reason” (each, as defined in the Employment Agreement), in any case (a “Qualifying Termination”), Mr. Bair is eligible to receive the following severance payments and benefits:
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(i) |
(A) an amount equal to 1.0 multiplied by Mr. Bair’s then current base salary, payable in substantially equal installments in accordance with the Company’s normal payroll practices over 12 months following the date of termination; or (B) if such Qualifying Termination occurs within the period commencing three months prior to and ending one year following the date on which a Change in Control (as defined in the 2021 Plan) is consummated (a “CIC Termination”), an amount equal to 1.5 multiplied by the sum of Mr. Bair’s then current base salary and target bonus, generally payable in installments over 18 months following the date of termination or, if the CIC Termination occurs on or within one year following the Change in Control, in a single lump sum within 30 days following the date of termination; |
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(ii) |
if such Qualifying Termination is a CIC Termination, an amount equal to the pro-rata portion of Mr. Bair’s annual bonus that would have otherwise been earned by Mr. Bair for the year in which the termination occurs (determined in accordance with the Employment Agreement and pro-rated based on the number of days Mr. Bair was employed by the Company during such year), payable no later than March 15 of the year following the year in which the termination occurs; |
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(iii) |
Company-paid healthcare coverage and life insurance for up to 12 months (or, if such termination is a CIC Termination, 18 months) following the date of termination; and |