Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Duncan Bates as President and CEO
Effective June 7, 2022, the Board of Directors (the “Board”) of Legacy Housing Corporation (the “Company”), appointed Duncan Bates as President and Chief Executive Officer (“CEO”).
Mr. Bates most recently served as Senior Vice President, Mergers & Acquisitions of Arcosa Inc., a publicly traded infrastructure products company since August 2018. Under his leadership, Arcosa executed 16 acquisitions and 2 divestitures in a three and ½ year period to reposition its portfolio around growth-oriented, high-margin products. Previously, he served as a Vice President in the Industrials Investment Banking Group at Stephens Inc. from June 2015 to August 2018. From February 2012 to June 2015, he worked in the Energy Investment Banking Group at Seaport Global Securities, LLC. Mr. Bates began his career in New York at Willis Re Inc. in July 2010. Mr. Bates received his B.S. Management degree with a double major in Finance and Legal Studies from Tulane University.
Mr. Bates replaces Kenneth Shipley, who as part of the management reorganization, will remain with the Company as Founder and Executive Vice President. Mr. Shipley will also remain a member of the Board.
Mr. Bates resigned from the Company’s Board effective June 7, 2022.
The Company also entered into an employment agreement (the “Agreement”) with Mr. Bates on June 7, 2022.
The Agreement provides for a term that commences on June 7, 2022 (the “Effective Date”) and expires on June 7, 2027, (the “Initial Employment Period”). Pursuant to the Agreement, Mr. Bates will serve in his current position with the Company, as set forth above, and will have duties, responsibilities, and authority that are customary to such position.
The Agreement provides for Mr. Bates to receive a base salary of $300,000 per year and a signing bonus consisting of a restricted stock award of 14,700 shares of Company common stock, which shall vest one-half each of the first and second anniversary of the Effective Date. Mr. Bates is eligible for an annual incentive bonus that will be determined by the Board. The Agreement grants Mr. Bates an option to purchase 300,000 shares of Company common stock at an exercise price of $36 per share, which shall vest one-tenth on each anniversary of the Effective Date and have a term of ten years and shall also be subject to the terms of the Company’s 2018 Incentive Plan. The Agreement also grants Mr. Bates an option to purchase 600,000 shares of Company common stock at an exercise price of $48 per share, which shall vest one-tenth on each anniversary of the Effective Date and have a term of ten years and shall also be subject to the terms of the Company’s 2018 Incentive Plan. Mr. Bates is also entitled to receive such health, death, disability, and other insurance benefits, and to participate in such retirement and other plans, as are made available to other executive officers of the Company.
The Agreement contains certain customary non-competition, non-solicitation and confidentiality provisions.
The foregoing summary and description of the Agreement are not and do not purport to be complete and are subject to, and qualified in its entirety by, the full text of the Agreement, a copy of which is filed as exhibit 10.1 is incorporated herein by reference.
Appointment of Francisco Coll as Director
On June 7, 2022, the Company’s Board appointed Francisco J. Coll to fill the vacancy in the Board created by the resignation of Duncan Bates. Mr. Coll’s appointment as a director is effective immediately and his term as a director will continue until the Company’s 2022 Annual Meeting of Stockholders or until his successor is duly elected and qualified. The Board determined that Mr. Coll is independent under the rules and regulations of both the Securities and Exchange Commission (the “SEC”) and the NASDAQ Stock Market. Mr. Coll will serve as Chairman of the Nominating and Corporate Governance Committee and is a member of the Audit Committee.
