Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Chief Executive Officer Appointment
On September 28, 2023, the Board of Directors (the “Board”) of Agiliti, Inc. (the “Company”) appointed Thomas J. Leonard as Chief Executive Officer effective as of October 1, 2023 (the “Effective Date”).
In connection with Mr. Leonard’s appointment, Mr. Leonard and the Company entered into an offer letter (the “Offer Letter”). Pursuant to the Offer Letter, Mr. Leonard will receive: (i) an annualized base salary of $1,000,000, less applicable taxes and withholdings, (ii) a signing bonus of $1,250,000, less applicable taxes and withholdings (the “Signing Bonus”), which will be paid in 15 equal monthly installments and (iii) a grant of restricted stock units under the the Company’s 2018 Omnibus Incentive Plan (the “Incentive Plan”) with a grant date value of $6,250,000, which will vest in 15 equal monthly installments and be subject to the terms and conditions of the Incentive Plan and the award agreement attached to the Offer Letter (the “RSUs”). Mr. Leonard’s employment pursuant to the Offer Letter will continue until terminated (a) by either party upon 90 days prior written notice or (b) upon the Company’s termination of Mr. Leonard’s employment for Cause (as defined in the Incentive Plan) (such period during which Mr. Leonard is employed pursuant to the Offer Letter, the “Term”). The Offer Letter does not provide for any severance benefits or additional payments upon a termination of Mr. Leonard’s employment. Upon the occurrence of a Change in Control (as defined in the Incentive Plan), Mr. Leonard will be entitled to receive: (x) a payment equal to any unpaid base salary that would have otherwise been paid for services through the 15-month period following the Effective Date, payable within 10 days following the date of such Change in Control; (y) a payment equal to any then-unpaid portion of the Signing Bonus, payable within 10 days following the date of such Change in Control and (z) accelerated vesting of the then-unvested RSUs. Prior to the end of the Term, the parties may mutually agree to enter into a new employment agreement that provides for market-based compensation and such other terms as the parties mutually agree.
The foregoing is not a complete description of the rights and obligations under the Offer Letter and is qualified in its entirety by reference to the full text and terms of the agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Mr. Leonard, 55, has been a member of the Board since 2015 and served as Chief Executive Officer of the Company from 2015 until March 2023. From April 2023 to September 2023, Mr. Leonard served as an Executive Partner at Thomas H. Lee Partners, L.P. Prior to joining the Company, Mr. Leonard served as the President of Medical Systems for CareFusion Corporation, which includes Alaris® infusion pumps, Pyxis® automated dispensing and patient identification systems, and AVEA® and LTV® series ventilators and respiratory diagnostics products. Prior to joining CareFusion in 2008, Mr. Leonard served as the Senior Vice President and General Manager of Ambulatory Solutions for McKesson Provider Technologies, and prior to that, Executive Vice President of Operations for Picis, Inc. Mr. Leonard has a bachelor’s degree in Engineering from the United States Naval Academy and an MBA from S.C. Johnson Graduate School of Management at Cornell University.
The Company is not aware of any direct or indirect material interest in any transaction between Mr. Leonard (or any of his immediate family members) and the Company that would require disclosure under Item 404(a) of Regulation S-K and there are no arrangements or understandings between Mr. Leonard and any other person relating to Mr. Leonard’s appointment as Chief Executive Officer of the Company. Mr. Leonard does not have any family relationships with any director, executive officer or person nominated or chosen by the Company to become an executive officer of the Company.
Chief Executive Officer Termination
On September 28, 2023 (the “Termination Date”), the Board terminated Thomas W. Boehning’s employment as Chief Executive Officer without cause. Also on the Termination Date, Mr. Boehning ceased to be a director and the size of the Board was reduced to 10 directors. Mr. Boehning’s termination is not the result of any disagreement on, or issues with respect to, any matter relating to the Company’s operations, policies or practices, including financial results or accounting controls.
