| ITEM 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
As previously reported, on January 8, 2020, the Board of Directors (the “Board”) of AAC Holdings, Inc., a Nevada corporation (the “Company”), appointed Andrew W. McWilliams, the Company’s Chief Financial Officer, to serve as Chief Executive Officer, commencing upon the effectiveness of Mr. Michael T. Cartwright’s previously reported resignation as Chief Executive Officer. Mr. Cartwright’s resignation became effective on January 24, 2020. On January 24, 2020, the Board appointed Mr. McWilliams to serve as a director on the Board.
There are no arrangements or understandings between Mr. McWilliams and any other person pursuant to which Mr. McWilliams was selected as a director of the Company. Since the beginning of the Company’s last fiscal year, the Company has not engaged in any transaction, or any currently proposed transaction, in which Mr. McWilliams had or will have a direct or indirect material interest in which the amount involved exceeded or would exceed $120,000.
Also, on January 24, 2020 (the “Effective Date”), the Company entered into an employment agreement with Mr. McWilliams (the “Employment Agreement”) with respect to his employment as the Company’s Chief Executive Officer. Pursuant to the Employment Agreement, Mr. McWilliams is entitled to receive an initial annual base salary commensurate with industry standards & experience and is eligible to receive a targeted annual cash bonus, as determined by the Board and subject to and in accordance with the Company’s annual bonus policies. As of the Effective Date, Mr. McWilliams was entitled to 500,000 shares of the Company’s common stock which have not been granted. Pursuant to the Employment Agreement, Mr. McWilliams is otherwise eligible to participate in any equity compensation plan of the Company on such terms as may be approved by the Board. The Employment Agreement has an initial term of three years, renewing annually for successiveone-year terms, subject to either party’s right to terminate the Employment Agreement by providing not less than 120 days’ notice prior to each suchone-year anniversary. If the Employment Agreement is terminated by the Company for cause (as defined therein) or by Mr. McWilliams without good reason (as defined therein), the Company must pay only such obligations as have accrued through the last day of employment. If the Employment Agreement is terminated by the Company other than for cause or by Mr. McWilliams for good reason, then the Company must continue to pay Mr. McWilliams’ base salary then in effect for a period of twenty-four months, continue to provide employee benefits during such period, and additionally pay to Mr. McWilliams any prorated bonus as determined by the Board. The Employment Agreement otherwise contains customarynon-competition, andnon-solicitation restrictions applicable during the term of the Employment Agreement and extending for a period of twelve months following termination of Mr. McWilliams’ employment with the Company, together with other customary terms and conditions.
