Under the terms of the Time-Based RSU Agreement, each RSU represents the right to receive one share of Common Stock upon vesting and the satisfaction of any required tax withholding obligation. Anversa must remain continuously employed by the Company from the grant date to the applicable vesting date of each RSU granted under the Time-Based RSU Agreement for vesting to occur. Notwithstanding the foregoing, (i) the Time-Based RSUs will vest as of the date of Anversa’s termination in the case of (i) Anversa’s death or Disability (as defined in the Time-Based RSU Agreement), (ii) termination without Cause by the Company or successor thereof, including following a Change in Control, or (iii) termination for Good Reason by Anversa.
The Start Date Bonus and Initial Equity Grants are intended by the Company to compensate Anversa for amounts he is foregoing from his previous employer by accepting a position with the Company. Anversa is entitled to receive additional equity awards in 2019 and beyond at the discretion of the Compensation Committee, commensurate with his position and the equity awards granted to other executive officers of the Company. In the event that, prior to the first anniversary of the Anversa Start Date, Anversa voluntarily terminates his employment with the Company without Good Reason or is terminated by the Company for Cause, Anversa will be required to repay the Start Date Bonus.
Anversa will be anat-will employee of the Company. However, in the event of a termination without Cause or for Good Reason, Anversa will be entitled to receive, in addition to immediate vesting of target RSUs under the Performance-Based RSU Agreement and all RSUs under the Time-Based RSU Agreement as described further above (the “Initial Equity Grant Acceleration Benefit”), a lump sum cash payment equal to the sum of (1) 12 months’ salary, (2) one full year’s bonus at target and (3) a prorated target bonus for the year of termination. In addition, in such circumstances, Anversa will be entitled to (1) immediate vesting of all unvested equity awards that were scheduled to vest during the first 12 months following Anversa’s termination (without duplication of the Initial Equity Grant Acceleration Benefit), (2) $50,000 for outplacement services and (3) continued health and welfare benefits for 12 months. Anversa’s right to receive the foregoing severance is conditioned upon his execution of a general release of claims, which becomes irrevocable, for the benefit of the Company. If the Company adopts a severance and/or change of control plan that includes executive officers of the Company, Anversa will be entitled to receive the more favorable of severance benefits between the Offer Letter and such plan.
Any incentive cash or equity compensation paid to Anversa will be subject to the Gentherm Incorporated Compensation Clawback Policy. On or prior to Anversa’s first day of employment, Anversa and the Company will enter into a Confidential Information and Inventions Assignment Agreement (the “Confidentiality Agreement”). Pursuant to the Confidentiality Agreement, Anversa will be subject tonon-competition andnon-solicitation requirements during employment and for 12 months after the termination of employment, and he will be subject to confidentiality requirements in perpetuity.
A copy of the Anversa Contract is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The above description of the material terms of the Anversa Contract is qualified in its entirety by reference to such exhibit.
Steele Separation Agreement
On December 11, 2018, the Company and Steele entered into a written agreement concerning Steele’s separation from the Company (the “Steele Contract”). In consideration for Steele’s assistance in providing transition services to the Company related to the appointment of Anversa as the new Chief Financial Officer and other factors, the Steele Contract provides for certain payments and benefits to Steele as of the date of the Public Announcement and upon Steele’s final termination of employment.
Pursuant to the Steele Contract, for so long as Steele remains employed by the Company, he will continue to receive his current salary and automobile allowance and continue to be eligible to receive his bonus under the Amended and Restated Gentherm Incorporated Performance Bonus Plan for 2018 (although he will not be eligible for a bonus for 2019). In addition, the Steele Contract provides that, effective as of the date of the Public Announcement, Steele is entitled to (1) payment of all accrued but unused vacation time, (2) immediate vesting of the 9,398 shares of restricted stock granted to Steele on October 3, 2017 that were scheduled to vest on April 3, 2019
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