The foregoing description of the Separation Agreement does not purport to be complete and is qualified in its entirety by reference to the copy of the Separation Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated herein by reference.
Employment Agreement with Mr. Glendinning
On September 6, 2023, the Company and Mr. Glendinning entered into an employment agreement (the “Employment Agreement”) setting forth the key terms, including compensation and benefits, of his employment as Chief Executive Officer. The Employment Agreement has an initial three-year term ending on September 15, 2026 and is subject to automatic renewal for successive 12-month terms unless written notice of non-renewal is delivered by either party to the other not less than 60 days prior to the expiration of the then-existing term. Notwithstanding any other provision of the Employment Agreement, the Employment Agreement may be terminated at any time by the Company or Mr. Glendinning.
Pursuant to the Employment Agreement, Mr. Glendinning (i) will receive an annual base salary equal to $1,350,000, subject to annual review and increase from time to time in the discretion of the Compensation and Governance Committee of the Board (the “Committee”); (ii) will be eligible to participate in the Company’s short-term incentive compensation plan at an annual target award amount of 150% of his base salary, pro-rated for service during any partial performance period; provided, however, that (a) for the 12-month period beginning on the Effective Date, Mr. Glendinning will be entitled to receive an annual incentive award in an amount no less than his annual target award amount, and (b) for the period beginning on September 15, 2024 and ending on the last day of fiscal 2024, Mr. Glendinning will be entitled to receive a pro-rata amount of his annual target award amount (based on the number of days in such portion of fiscal 2024) according to performance levels agreed with the Committee that were achieved for such portion of fiscal 2024; and (iii) will be eligible for cash/and or equity long-term incentive awards in the Committee’s discretion. Commencing for fiscal 2024, Mr. Glendinning’s annual long-term incentive target award amount will equal $4,200,000, with 50% of the award vesting in equal installments on each of the first three anniversaries of the grant date and the remaining 50% of the award vesting on the third anniversary of grant date subject to the achievement of performance-based vesting conditions established by the Committee.
Also in connection with his appointment, Mr. Glendinning will be eligible to receive a cash make-whole bonus equal to $2,000,000, 50% of which will be payable on January 1, 2024, and 50% of which will be payable on January 1, 2025, subject to his continuous employment through January 1, 2025. Mr. Glendinning will also be eligible for an inducement grant consisting of 150,000 performance-based restricted stock units (“PSUs”) that will become eligible to vest (with a maximum payout of 200% of target) on the last day of fiscal 2026 based on the Company’s stock price performance during the period between the grant date and the last day of fiscal 2026. Mr. Glendinning will be entitled to participate in all employee benefit plans and programs maintained by the Company and made available to senior executives of the Company generally.
Under the Employment Agreement, if Mr. Glendinning’s employment with the Company is terminated by the Company other than for death, “disability” or “cause,” or by Mr. Glendinning for “good reason” (in each case as defined therein), or if Mr. Glendinning’s employment with the Company terminates due to the expiration of the initial term or any renewal term on or prior to the sixth anniversary of the Effective Date based upon notice of non-renewal by the Company, and Mr. Glendinning signs a general release and continues to comply with the restrictive covenants set forth in the Employment Agreement, then Mr. Glendinning will be entitled to receive: (i) a lump sum equal to 1.5 times his base salary paid no later than 60 days following the date of termination, (ii) the amount of any unpaid short-term incentive compensation for any performance period ending prior to the date of termination, based on actual achievement; (iii) a short-term incentive compensation amount for the performance period during which the date of termination occurs, based on actual achievement and pro-rated based on the number of days employed during the performance period; provided, however, that if Mr. Glendinning’s employment is terminated prior to September 15, 2024, he will receive no less than the full amount of the annual incentive target award; and (iv) if Mr. Glendinning timely elects the continuation of coverage, a lump sum equal to the monthly medical and dental care plan premium under COBRA for an 18-month period paid no later than 60 days following the date of termination. In addition to the amounts described above, the Company will also pay Mr. Glendinning any earned but unpaid base salary as of the date of termination and reimburse him for any and all monies advanced or expenses incurred through the date of termination.
