Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Adam Price
On December 27, 2019, Adam Price (“Mr. Price”) resigned his position as Chief Executive Officer and as a Class II member of the Board of Directors (the “Board”) of Waitr Holdings Inc. (the “Company”).
Carl A. Grimstad
On January 2, 2020, the Board appointed Carl A. Grimstad (“Mr. Grimstad”) to the position of Chief Executive Officer and as a Class II member of the Board, filling the Board seat vacated by Mr. Price.
Mr. Grimstad, age 51, is currently the chief manager of C. Grimstad Associates, LLC, a family private investment entity formed in 2006, and the managing partner of GS Capital, LLC, a family private investment company formed in 1995. In 1999, Mr. Grimstadco-founded iPayment Inc. (“iPayment”) and acted as the President of iPayment until 2011, when he became the Chairman and Chief Executive Officer of the company until 2016. Under the leadership of Mr. Grimstad, iPayment closed an initial public offering in 2003 and then went private in 2006. Mr. Grimstad serves on the board of directors of Beauty Tap Inc. and Kard Financial Inc. Mr. Grimstad graduated with a B.A. in Economics from Boston University in 1989.
There is no arrangement or understanding between Mr. Grimstad and any other person pursuant to which he was appointed as Chief Executive Officer or a director of the Company, and there are no related party transactions in which Mr. Grimstad has an interest requiring disclosure pursuant to Item 404(a) of RegulationS-K promulgated under the Exchange Act of 1934, as amended (the “Exchange Act”). In addition, there is no family relationship between Mr. Grimstad and any of the Company’s directors or other executive officers.
Employment Agreement
The Company entered into an employment agreement, dated as of January 3, 2020 (the “Employment Agreement”), with Mr. Grimstad pursuant to which Mr. Grimstad will serve as the Chief Executive Officer of the Company. In such position, Mr. Grimstad will have such duties, authority and responsibilities as shall be determined from time to time by the Board (the “Services”). The term of the Employment Agreement expires on January 3, 2022 (the “Term”), unless earlier terminated by either party. The Employment Agreement includes customary obligations related to confidentiality,non-competition and intellectual property right protection and provides Mr. Grimstad indemnification rights concerning his service as the Chief Executive Officer of the Company.
For providing the Services, the Company will provide the following compensation to Mr. Grimstad:
| | • | | a base salary of $83,333 per month(pro-rated during the first and last pay period) (the “Monthly Compensation”); |
| | • | | a bonus of $3,000,000 (the “Bonus”) if (i) Mr. Grimstad serves through the Term, (ii) a Corporate Change (as defined in the Employment Agreement) occurs, (iii) the Employment Agreement is terminated by Mr. Grimstad for Good Reason (as defined in the Employment Agreement) or (iv) the Company terminates the Employment Agreement other than for Misconduct (as defined in the Employment Agreement); and |
| | • | | an option (the “Option”), issued under the Waitr Holdings Inc. 2018 Omnibus Incentive Plan (the “Plan”), pursuant to an option agreement between the Company and Mr. Grimstad dated January 3, 2020 (the “Option Agreement”), exercisable for a number of shares of the common stock, par value $0.0001 per share, of the Company (the “Common Stock”) equal to 12.5% of the issued and outstanding Common Stock on January 3, 2020. |
The exercise price of the Option is $0.37, and the Option is exercisable, at Mr. Grimstad’s option, on a “net exercise” basis. The Option shall vest (any date on which the Option vests, in whole or in part, a “Vesting Date”) 50% on January 3, 2021 and 50% on January 3, 2022 (in each case, subject to the Employment Agreement not having been previously terminated), and shall fully vest upon (i) the consummation of a Corporate Change which occurs during the Term or (ii) the date the Employment Agreement is terminated by Mr. Grimstad for Good Reason or by the Company for other than Misconduct, and shall expire on January 3, 2025; provided, however, that the Option shall not be exercisable upon its vesting unless the stockholders of the Company shall have approved an amendment to the Plan to increase the number of shares of Common Stock available for awards under the Plan by an amount equal to at least the number of shares of Common Stock underlying the Option (the “Increase”); and provided, further, that if, on any date when Mr. Grimstad wishes to exercise a portion of the Option that has vested (an “Exercise Date”), the stockholders of the Company shall not have approved the Increase, the Company shall pay to Mr. Grimstad an amount in cash equal to (A) the number of shares for which the option has vested and for which Mr. Grimstad wishes to exercise the Option (the “Exercised Shares”) multiplied by (B) the excess, if any, of (1) the volume weighted average
1
