| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Planned Executive Chairman Succession
On February 22, 2023, the Board of Directors (the “Board”) of Dorman Products, Inc. (the “Company”) approved a planned succession process, whereby Steven L. Berman will step down from his role as Executive Chairman and be appointed to serve as Non-Executive Chairman of the Board effective April 1, 2023 (the “Effective Date”). In connection with this planned succession process, Mr. Berman’s Amended and Restated Employment Agreement, dated December 28, 2015 (the “Employment Agreement”), will not be renewed and therefore will cease as of the Effective Date.
Pursuant to the terms of the Employment Agreement, Mr. Berman will receive the payments and benefits as required under Section 5.4.2 of the Employment Agreement in connection with his transition from Executive Chairman to Non-Executive Chairman of the Board, including: (i) continued annual base salary in the amount of $420,000 for three years following the Effective Date (the “Applicable Period”); (ii) an annual cash bonus in the amount $150,000, on each March 15 during the Applicable Period; and (iii) continued coverage under the Company’s health and welfare plans for the Applicable Period or a stipend for such coverage (the “Obligations”).
Consistent with terms and provisions of the Company’s 2018 Stock Option and Stock Incentive Plan (the “Plan”), and Mr. Berman’s outstanding equity award agreements thereunder, Mr. Berman’s outstanding unvested equity awards (the “Unvested Awards”) will continue to vest and his vested but unexercised stock option awards (the “Unexercised Option Awards”) will remain exercisable, subject to their expiration date, so long as Mr. Berman serves as a member of the Board. Therefore, because the Obligations, the continued vesting of such Unvested Awards and the continued right to exercise such Unexercised Option Awards will serve as consideration to Mr. Berman while serving as a non-employee director of the Board, Mr. Berman will not receive compensation (other than reimbursement of expenses) under the Company’s non-employee director compensation program until the later of the date the Unvested Awards vest and are payable and April 1, 2026.
Payment of the Obligations is subject to Mr. Berman’s execution and non-revocation of a release and waiver of claims in favor of the Company and his compliance with certain restrictive covenants, including, without limitation, non-competition and non-solicitation obligations, which are set forth in a transition and release agreement (the “Transition Agreement”).
The foregoing summary of the Employment Agreement is qualified in its entirety by reference to the full text of the Employment Agreement, which was previously filed on December 28, 2015 by the Company with the Securities and Exchange Commission as Exhibit 10.2 to the Current Report on Form 8-K and is incorporated herein by reference. The foregoing summary of the Transition Agreement is qualified in its entirety by reference to the full text of the Transition Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
