| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Chief Financial Officer and Treasurer Appointment
On June 11, 2019, Charah Solutions, Inc. (the “Company”) announced that the Board of Directors (the “Board”) of the Company appointed Roger D. Shannon, age 54, as Chief Financial Officer and Treasurer of the Company, effective June 17, 2019 (the “Start Date”). Effective as of the Start Date, Mr. Shannon will serve as the Principal Financial Officer and Principal Accounting Officer of the Company.
On June 10, 2019, the Company and its subsidiary, Charah, LLC, entered into an employment agreement with Mr. Shannon to be effective on the Start Date (the “CFO Employment Agreement”). The initial term of the CFO Employment Agreement is three years and the term will automatically renew annually for successive12-month periods unless either party provides written notice ofnon-renewal at least 60 days prior to the expiration of the initial term or any renewal term.
Pursuant to the CFO Employment Agreement, Mr. Shannon will receive an annualized base salary of $415,000, and is eligible to receive (i) an annual bonus of up to 70% of his base salary, with a guaranteed bonus of at least $145,250 for the 2019 calendar year, (ii) annual awards under the Company’s 2018 Omnibus Incentive Plan, with the target value of his 2019 awards to be equal to 100% of his base salary, and (iii) a lump sum cash payment of $20,000 and reimbursement of certain expenses to aid with his relocation to Louisville, Kentucky.
The CFO Employment Agreement also provides for certain severance benefits following a termination without “cause” or a resignation for “good reason” (each quoted term as defined in the CFO Employment Agreement) including (i) cash severance equal to one times (or, if within two years following a change in control, one and a half times) the sum of (a) the then-current annualized base salary and (b) the target annual bonus for the year of termination, (ii) reimbursement of a certain portion of premiums paid for continuation coverage under the Company’s group health plans, and (iii) apro-rated annual bonus for the year in which the termination occurs. Upon Mr. Shannon’s death or “disability” (as defined in the CFO Employment Agreement), Mr. Shannon will receive, as a severance payment, apro-rated annual bonus for the year of his termination based on actual performance for such year. All severance payments and benefits are contingent upon Mr. Shannon signing a release in favor of the Company and its affiliates. Additionally, the CFO Employment Agreement contains certain restrictive covenants regarding confidential information,non-competition,non-solicitation, andnon-disparagement. This summary of the CFO Employment Agreement is qualified in its entirety by reference to the full text of the CFO Employment Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
In addition to the benefits provided under the CFO Employment Agreement, in connection with his appointment as Chief Financial Officer and Treasurer, Mr. Shannon will also receive aone-time equity award under the Company’s 2018 Omnibus Incentive Plan comprised of restricted stock units with a grant date value of approximately $500,000.
In connection with his appointment, the Company will enter into its standard indemnification agreement with Mr. Shannon, the form of which was filed as Exhibit 10.2 to the Company’s Registration Statement on FormS-1 filed with the Securities and Exchange Commission on May 18, 2018.
Prior to joining the Company, Mr. Shannon served in various roles at ADTRAN, a public company producer of next-generation networking services, including as Chief Financial Officer, Senior Vice President of Finance, Treasurer and Head of Corporate Development since 2015. Prior to his time at ADTRAN, Mr. Shannon served as the Chief Financial Officer and Treasurer for Steel Technologies starting in 2006.
There are no arrangements or understandings between Mr. Shannon and any other persons, pursuant to which he was appointed to the offices described above and no family relationships among any of the Company’s directors or executive officers and Mr. Shannon. Additionally, Mr. Shannon does not have any direct or indirect interest in any transaction that would require disclosure pursuant to Item 404(a) ofRegulation S-K.
