Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment and Compensation of Chief Executive Officer
On April 19, 2019, Compass Minerals International, Inc. (the “Company”) entered into an Employment Agreement with Kevin S. Crutchfield to serve as the Company’s President and Chief Executive Officer (the “Employment Agreement”) and as a member of the Company’s Board of Directors (the “Board”), effective May 7, 2019.
The Employment Agreement has a three year term, but automatically extends for successiveone-year periods unless the Company provides60-days’ advance written notice ofnon-renewal, or unless earlier terminated. Under the terms of the Employment Agreement, Mr. Crutchfield will be entitled to an annual base salary of $1,050,000 per year, an annual incentive compensation bonus with a target of at least 125% of his annual base salary and annual long-term equity awards with a value of at least 325% of his annual base salary.
The Employment Agreement provides that, for 2019, Mr. Crutchfield will be granted 32,274 performance stock units based on the Company’s ROIC performance and 27,839 performance stock units based on the Company’s rTSR performance (the same performance objectives governing the awards granted to the Company’s other executive officers on April 1, 2019), which will vest on April 1, 2022. Mr. Crutchfield will also be granted a make-whole inducement equity award consisting of 47,170 restricted stock units and stock options to purchase 252,245 shares of common stock, each vesting in substantially equal annual installments over a three-year period.
If the Company terminates Mr. Crutchfield’s employment without Cause or does not renew the Employment Agreement or if Mr. Crutchfield terminates his employment for Good Reason (each as defined in the Employment Agreement), he will be entitled to apro-rated annual incentive compensation bonus through the date of termination at the target level for such year and an amount equal to the sum of 24 months’ of his base salary and two times his target bonus, payable in a single lump sum. In addition, he will receive reimbursement up to a maximum of 18 months for premium payments for COBRA coverage and immediate vesting of all stock options and restricted stock units granted through the date of termination. All unvested performance stock units will be forfeited.
Unless otherwise provided for in the Employment Agreement, the treatment of Mr. Crutchfield’s equity awards will be determined by the Company’s 2015 Incentive Award Plan, equity rules and the applicable award agreements.
If Mr. Crutchfield’s employment terminates as a result of his death or disability, his make-whole inducement award will fully vest immediately, and he will receive apro-rated annual incentive compensation bonus through the date of termination at the target level and continued health benefits for 18 months, in the case of death, or the length of the period he is receiving disability benefits under the Company’s benefit policies, in the case of disability.
Mr. Crutchfield and the Company also entered into a Restrictive Covenant Agreement, a Confidentiality Agreement and a Change in Control Severance Agreement, in each case generally consistent with the Company’s standard forms for executive officers. Pursuant to the Restrictive Covenant Agreement, for a period of two years post-termination for any reason, Mr. Crutchfield will be subject to anon-solicit covenant applying to employees and customers and anon-compete covenant. Pursuant to the Change in Control Severance Agreement, if the Company terminates Mr. Crutchfield’s employment without Cause or does not renew the Employment Agreement or if Mr. Crutchfield terminates his employment for Good Reason, in each case within the two years following a Change in Control (each as defined in the Change in Control Severance Agreement), Mr. Crutchfield will be entitled to receive an amount equal to 2.5 times the sum of (i) his base salary and (ii) the higher of his average bonus over the three years prior to the date of termination and his annual target bonus, payable in a single lump sum, and continued benefits for 18 months, subject to reduction if his payments would otherwise trigger Section 280G of the Internal Revenue Code and such a reduction would result in him receiving a greaterafter-tax amount of payments.
To be eligible for the severance payments described above under either the Employment Agreement or the Change in Control Severance Agreement, Mr. Crutchfield will be required to execute a release of claims against the Company and be in compliance in all material respects with his Restrictive Covenant Agreement and his Confidentiality Agreement.
Mr. Crutchfield will also receive relocation benefits commensurate with executive level employees.
The description of the Employment Agreement contained in this Form8-K is not intended to be complete, and is qualified in its entirety by reference to the complete text of the Employment Agreement, a copy of which is attached as Exhibit 10.1.
