Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of President and Chief Executive Officer and Director
On January 20, 2022, Brian K. Moore, the Company’s executive vice president, was appointed to serve as president and chief executive officer and a member of the board of directors of the Company in accordance with the Stockholders’ Agreement by and among the Company and its stockholders party thereto, dated as of February 2, 2021, as amended. Mr. Moore will also serve on the audit committee and compensation committee of the Company’s board of directors. As a result of Mr. Moore’s appointment, Michael Y. McGovern, the Company’s executive chairman of its board of directors, will no longer perform the functions of the Company’s principal executive officer but will remain with the Company as executive chairman of the board of directors.
In connection with his appointment as president and chief executive officer, the board of directors and the compensation committee of the board of directors approved a binding term sheet with Mr. Moore (the “Employment Term Sheet”), which provides for an initial annual base salary of $750,000 and a target annual incentive award opportunity equal to 100% of his annual base salary, with an initial three-year term that automatically extends for additional one-year terms unless either party gives at least 60 days prior written notice of non-renewal before expiration of the then-current term.
The Employment Term Sheet provides for an award having a grant date fair value equal to $9.0 million, consisting of 20% of time-based restricted stock units (“RSUs”) and 80% of performance-based restricted stock units (“PSUs”). The RSUs will be subject to vesting over three years, ratably or upon earlier vesting of the PSUs, subject to Mr. Moore’s continued employment. The PSUs will be subject to vesting based on achievement of pre-established specified performance goals, subject to Mr. Moore’s continued employment with the Company through and including the date of achievement of such goals.
If Mr. Moore’s employment is terminated by the Company without cause as defined in the Employment Term Sheet or by Mr. Moore for good reason as defined in the Employment Term Sheet, or if Mr. Moore’s employment is terminated due to disability, then the Company will pay or provide Mr. Moore:
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His base salary through the date of termination, any earned but unpaid cash incentive compensation for the preceding calendar year, any rights under the terms of equity awards and any medical or other welfare benefits required by law (the “Accrued Amounts”);
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A lump sum severance payment equal to: (1) two times the sum of Mr. Moore’s annual salary plus target annual bonus; and (2) Mr. Moore’s pro-rated target annual bonus for the year of termination; and
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Healthcare continuation benefits for up to 24 months (the “Welfare Continuation Benefit”).
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The payments and benefits described above (other than the Accrued Amounts) are subject to Mr. Moore’s timely execution of a release of claims in favor of the Company.
If Mr. Moore’s employment is terminated by the Company for cause, by Mr. Moore other than for good reason or due to Mr. Moore’s death, then the Company will only be required to pay to Mr. Moore or Mr. Moore’s estate the Accrued Amounts.
Mr. Moore will also be bound by a 24-month post-termination non-compete covenant and a 12-month post-termination non-solicitation covenant.
A description of Mr. Moore’s positions with the Company, business experience and certain biographical information is set forth in the Company’s Form 10-K for fiscal year ended December 31, 2020 filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 26, 2021, which information is incorporated by reference herein.
There are no family relationships between Mr. Moore and any other director or executive officer of the Company that require disclosure under Item 401(d) of Regulation S-K. Other than with respect to the Employment Term Sheet, there are no transactions between Mr. Moore or any member of his immediate family, on the one hand, and the Company