| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Retirement of Thomas Ernst as Chief Financial Officer
On October 2, 2023, Symbotic Inc. (the “Company”) announced that Thomas Ernst plans to retire as Chief Financial Officer and Treasurer of the Company, with his retirement to be effective on December 15, 2023 (such date, or an earlier date that his employment with the Company terminates for any reason, the “Retirement Date”). Mr. Ernst will continue to serve as the Company’s Chief Financial Officer, Treasurer, principal financial officer and principal accounting officer (collectively, the “Current Roles”) and assist with transition matters through the Retirement Date, when his employment with the Company will end. Mr. Ernst will continue to receive the salary and benefits he currently receives during this period and any outstanding equity awards held by Mr. Ernst during this period will remain outstanding and eligible to vest in accordance with their terms.
In connection with his planned retirement, Mr. Ernst entered into a transition agreement (the “Transition Agreement”) with the Company as of October 1, 2023. Pursuant to the Transition Agreement, Mr. Ernst will continue to serve in his Current Roles through the Retirement Date, after which he will serve as a consultant to the Company’s Chief Executive Officer and new Chief Financial Officer through September 28, 2024 (the “Consulting Period”). Upon termination of employment on the Retirement Date, Mr. Ernst will receive (1) aggregate severance payments of $375,000, payable in accordance with the Company’s normal payroll schedule over a period of twelve (12) months, (2) aggregate consulting fee payments of $50,000, payable in nine equal monthly payments during his Consulting Period, (3) continued vesting of his September 10, 2020 incentive unit award through and including the end of the Consulting Period and (4) continued vesting of his February 6, 2023 restricted stock unit award through and including the end of the Consulting Period (collectively, the “Severance Benefits”). Mr. Ernst will also receive his annual bonus for fiscal year 2023 based on the company bonus achievement percentage applicable to the Company’s executive leadership team, payable on the regularly scheduled payday upon which bonuses for fiscal year 2023 are paid to the Company’s executive leadership team.
Mr. Ernst will also be entitled to continuation of group medical insurance coverage subsidized by the Company through December 31, 2024. Notwithstanding the foregoing, in the event the Retirement Date occurs as a result of a termination for Cause (as defined in Mr. Ernst’s Non-Competition Agreement, dated as of September 4, 2020), Mr. Ernst will not be entitled to the Severance Benefits described above. Under the Transition Agreement, the Severance Benefits will be furnished and paid, subject to applicable withholdings and deductions, contingent on (a) Mr. Ernst’s execution and non-revocation of a general release of claims, (b) continued compliance with the confidentiality, non-solicitation and non-disparagement provisions contained in the Transition Agreement, (c) continued compliance with his non-compete provisions for a period of one year following the Consulting Period, (d) an agreement not to transfer shares of the Company’s common stock for a period of four months following the Retirement Date and (e) Mr. Ernst’s performance of certain obligations with respect to the Company’s periodic reporting with the U.S. Securities and Exchange Commission.
A copy of the Transition Agreement is attached hereto as Exhibit 10.1 and incorporated herein by reference. The foregoing description of the Transition Agreement is qualified in its entirety by reference to the full text of the Transition Agreement.
Appointment of Carol Hibbard as Chief Financial Officer
On October 2, 2023, the Company announced the appointment of Carol Hibbard as Chief Financial Officer and Treasurer of the Company effective December 15, 2023.
Ms. Hibbard, age 56, joins the Company from The Boeing Company, a major aerospace firm, where she served as Senior Vice President and Controller since April 2021. Previously, Ms. Hibbard held various strategic and financial roles with The Boeing Company, including Vice President and Chief Financial Officer of Boeing Defense, Space & Security (“BDS”) from May 2017 through April 2021, Controller of BDS from January 2017 until May 2017 and as Vice President and Chief Financial Officer of The Boeing Company’s former Engineering, Operations & Technology organization from April 2015 until January 2017. Prior to that, Ms. Hibbard held successive executive positions in financial planning & analysis, estimating, and procurement and supported numerous business unit programs since joining The Boeing Company in 1996. Ms. Hibbard earned a Bachelor of Science degree in statistics and business from the University of Pittsburgh and a Master of Business Administration degree from Virginia Polytechnic University.
Pursuant to an offer letter dated September 17, 2023 between Ms. Hibbard and the Company (the “Offer Letter”), Ms. Hibbard’s employment will commence effective as of October 23, 2023, or such other date as mutually agreed by Ms. Hibbard and the Company’s Chief Executive Officer (such date, the “Start Date”). Ms. Hibbard will serve as Chief Financial Officer designate until she assumes the roles of Chief Financial Officer, Treasurer, principal financial officer and principal accounting officer of the Company effective December 15, 2023. Ms. Hibbard’s base salary will be $600,000, and she will be eligible for an annual performance bonus target of 85% of her base salary under the Company’s annual cash bonus program. Ms. Hibbard will receive a sign-on cash bonus of $300,000, half of which will be paid after one month after the Start Date and the other half will be paid on the one-year anniversary of the Start Date. The sign-on cash bonus is subject to repayment if Ms. Hibbard service terminates for Cause (as defined in the Offer Letter) or without Good Reason (as defined in the Offer Letter) within two years. Ms. Hibbard will also receive an equity award comprised of restricted stock units and performance stock units with an aggregate target value of $10,000,000. Two-thirds of the equity awards will be in the form of a restricted stock unit award that will vest over three years, with the first one-third vesting on the one-year anniversary of the grant date, and the remaining portion vesting in eight equal quarterly installments thereafter. The remaining one- third of the equity awards will be in the form of a performance stock unit award that will vest, subject to
