Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Agreements of Certain Officers.
(b) and (c)
On August 22, 2018, Capital Senior Living Corporation (the “Company”) announced the retirement, effective January 1, 2019, of Mr. Lawrence A. Cohen, the Company’s Vice Chairman of the Board and Chief Executive Officer.
In connection with such retirement, the Company and Mr. Cohen have entered into a Retirement and Separation Agreement, dated as of August 21, 2018 (the “Agreement”). The description of the Agreement herein is qualified in its entirety by reference to the Agreement, a copy of which is filed as Exhibit 10.1 to this report and is incorporated by reference herein.
Mr. Cohen will (i) resign from his positions as Vice Chairman of the Board, as a director of the Company and as the Chief Executive Officer of the Company and all similar positions held by Mr. Cohen with any subsidiaries and affiliates of the Company effective January 1, 2019 (the “Retirement Date”) and (ii) be obligated to serve as a consultant to the Company for two years thereafter. To the extent that the Company designates Mr. Cohen’s successor as Chief Executive Officer before the Retirement Date, he will relinquish that title but will continue to serve as an executive employee until the Retirement Date.
In connection with Mr. Cohen’s consulting obligations, the Company will pay Mr. Cohen aggregate consulting consideration totaling $2,555,252.84, such amount to be paid over time in substantially equal installments for atwo-year period commencing immediately following Mr. Cohen’s retirement on January 1, 2019.
All outstanding and unvested time-based restricted stock awards granted to Mr. Cohen on March 27, 2018, March 28, 2017 and February 24, 2016 under the Company’s 2007 Omnibus Stock and Incentive Plan (the “Omnibus Plan”) will vest immediately prior to Mr. Cohen’s retirement on January 1, 2019, and for purposes of the three outstanding and unvested performance-based restricted stock awards granted to Mr. Cohen on February 24, 2016 under the Omnibus Plan, the remaining unvested shares thereunder will remain eligible for vesting subject to achievement of the applicable performance metrics thereunder after January 1, 2019 notwithstanding Mr. Cohen’s retirement.
Mr. Cohen will be entitled to participate in the Company’s 2018 Annual Incentive Plan in respect of the Company’s 2018 performance, subject to (i) the achievement of the applicable performance metrics thereunder and (ii) certain reductions in the payouts thereunder that are made at the discretion of the Company’s compensation committee.
The Agreement also references and contains certain covenants of Mr. Cohen regardingnon-competition,non-solicitation of Company employees, confidentiality and use of certain information,non-disparagement, cooperation and a release of claims in connection with his employment.
The Agreement does not terminate any right Mr. Cohen may have to indemnification under the Company’s organizational documents or agreements, applicable law or the Company’s director and officer liability insurance.
(e)
The description of the Agreement set forth in Items 5.02(b) and (c) above is incorporated by reference into this Item 5.02(e).
