Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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Resignation of Chief Financial Officer
On September 5, 2021, Jay Amond resigned from
his position as the Chief Financial Officer of 1847 Holdings LLC (the “Company”). Mr. Amond’s resignation was not due
to any disagreement with the Company on any matter relating to its operation, policies (including accounting or financial policies) or
practices.
On September 6, 2021, the Company entered into
a separation agreement and release (the “Separation Agreement”) with Mr. Amond providing for the separation of his employment
with the Company effective as of September 5, 2021. Under the Separation Agreement, the Company agreed, subject to Mr. Amond’s compliance
with each and every provision of the Separation Agreement, to pay Mr. Amond a severance payment equal to nine (9) months of his base salary
at his current level ($240,000 per year), less applicable statutory deductions and authorized withholdings, payable in equal installments
on the Company’s regular payroll dates during the period commencing on September 6, 2021 and ending on June 6, 2022. The Company
also agreed to continue to pay its share of Mr. Amond’s health care costs under the Company’s medical, dental or vision plans
in which Mr. Amond participates for a period beginning as of October 1, 2021 and ending as of December 31, 2021; provided, however, that
Mr. Amond will be responsible for the full amount of the applicable employee contribution as determined and periodically modified by the
Company. Mr. Amond is entitled to no additional compensation, payments or benefits of any kind from the Company pursuant to the Separation
Agreement.
The Separation Agreement includes a
customary release of claims by Mr. Amond in favor of the Company and its affiliates, as well as customary confidentiality and non-disparagement
provisions. Mr. Amond may revoke the Separation Agreement for a period of seven (7) days after the date of the Separation Agreement by
providing notice in writing to the Company, and the Separation Agreement will not become fully effective and enforceable until after the
expiration of such seven-day revocation period.
The foregoing description of the Separation Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the Separation Agreement filed as Exhibit
10.1 to this report, which is incorporated herein by reference.
Appointment of Chief Financial Officer
On September 5, 2021, the board of directors of
the Company appointed Vernice L. Howard as the new Chief Financial Officer of the Company, effective as of September 7, 2021.
Vernice L. Howard, age 51, has over 30 years of
experience in the fields of finance and accounting. Prior to joining the Company, Ms. Howard worked for Independent Electrical Contractors,
Inc. and its affiliates for over eleven years as Chief Financial Officer, where she was responsible for providing leadership to the organization
in the areas of finance, human resources and general facilities administration, in addition to setting policies, procedures, strategies,
practices and overseeing the organization’s assets. The foundation of Ms. Howard’s accounting and finance experience began
with public accounting for several years gaining experience in tax and auditing in the entertainment and nonprofit sectors as Chief Financial
Officer for The Cronkite Ward Company, a television production company, and Director of Finance for Community Action Group (CAG), a nonprofit
organization. Before her work with Independent Electrical Contractors, Inc., Ms. Howard’s professional background established an
emphasis in forensic accounting. Her experience in forensic accounting has provided financial restructuring for every company with which
she has held a position. She has a visionary ability to strategically identify the problem and implement result-driven financial solutions.
Her skills have been held in high esteem in many court cases as an expert with providing restored finances in the millions to companies.
Ms. Howard is a Founding Member of Chief, which is a DC based vetted network of C-level or rising VP’s supporting and connecting
exceptional women. Ms. Howard holds a Master of Business Administration in Finance from Trinity Washington University Graduate School
of Business Management and Bachelor of Science in Accounting from Duquesne University.
Ms. Howard was elected until her successor is
duly elected and qualified. There are no arrangements or understandings between Ms. Howard and any other persons pursuant to which she
as selected as Chief Financial Officer. There are no family relationships that exist between Ms. Howard and any directors or executive
officers of the Company. In addition, there has been no transaction, nor is there any currently proposed transaction, between Ms. Howard
and the Company that would require disclosure under Item 404(a) of Regulation S-K.
On September 7, 2021, the Company entered into
an employment offer letter (the “Employment Agreement”) with Ms. Howard setting forth the terms of the compensation for her
services as Chief Financial Officer of the Company. Pursuant to the Employment Agreement, Ms. Howard is entitled to an annual base salary
of $240,000, consisting of $80,000 for each of the Company’s three portfolio companies, up to a maximum aggregate annual base salary
of $300,000 upon the addition of a fourth portfolio company. She will also be eligible for an annual incentive bonus of up to 50% of base
salary based on earnings targets to be determined by the board of directors of the Company. Ms. Howard is also eligible to participate
in all employee benefit plans, including health insurance, commensurate with her position. Ms. Howard’s employment is at-will
and may be terminated by the Company at any time or by Ms. Howard upon 90 days’ notice. If the Company terminates Ms. Howard’s
employment without cause, she is entitled, subject to her execution of a release of claims in favor of the Company, to six months of base
compensation, which will be paid in a lump sum upon termination. The Employment Agreement contains customary confidentiality provisions
and restrictive covenants prohibiting Ms. Howard from (i) owning or operating a business that competes with the Company during the term
of her employment and for a period of one year following the termination of her employment or (ii) soliciting the Company’s employees
for a period of two years following the termination of her employment.
The foregoing description of the Employment Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the Employment Agreement filed as Exhibit
10.2 to this report, which is incorporated herein by reference.