| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers |
As previously disclosed, on August 1, 2015, Gentherm Incorporated (the “Company”) entered into an Executive Relocation and Employment Agreement (the “Employment Agreement”) with Frithjof Oldorff (“Oldorff”). The Employment Agreement had an initial term of three years, which was further extended on October 3, 2017. Oldorff and the Company have agreed that Oldorff’s employment with the Company will terminate on July 1, 2019 (the “Separation Date”), which termination is not the result of Oldorff’s disagreement with any of the Company’s operations, policies or practices.
To ensure an orderly transition of Oldorff’s duties and to ensure a clear understanding of each party’s rights and responsibilities pertaining to such separation, the Company and Oldorff entered into a Separation Agreement and Release, dated May 6, 2019 (the “Separation Agreement”). Under the terms of the Separation Agreement, Oldorff will remain employed by the Company through the Separation Date. For so long as Oldorff remains employed by the Company, Oldorff will continue to receive his current base salary, employee health and welfare benefits (both for the U.S. and Germany), housing allowance, and use of a Company automobile. He will not be eligible for a bonus for 2019. Oldorff also will vest in 2,753 restricted stock units on June 11, 2019, and his outstanding options will be exercisable for 90 days following the Separation Date; all other unvested awards will automatically terminate and be forfeited on the Separation Date.
On the Separation Date, the Company will pay Oldorff one month’s current base salary as cash severance (the “Severance Payment”). In addition to the Severance Payment, the Separation Agreement provides that Oldorff is entitled to payment of all accrued but unused vacation time through the Separation Date and specified repatriation benefits (including flights for him and his family to Germany, specified freight to Germany of household goods, brokerage commissions and closing costs on the sale of his U.S. home if sold within 12 months of the Separation Date, and temporary housing for up to 30 days). Further, Oldorff will remain entitled to the tax protection provided in the Employment Agreement, which addresses the tax differentials between the U.S. and Germany, and the Company will pay for a tax advisor related to 2019 and 2020 federal and state tax returns of Oldorff.
Pursuant to the Separation Agreement, Oldorff and the Company have agreed to a mutual general release from substantially all claims to the extent permitted by applicable law and other specified limitations, and the Company’s requirement to provide the benefits of the Separation Agreement to Oldorff will become effective following the expiration of Oldorff’s revocation period as required by applicable law. Pursuant to a previously-executed Confidential Information and Inventions Assignment Agreement, he remains subject to confidentiality requirements during his remaining employment and thereafter. Further, Oldorff is subject tonon-competition andnon-solicitation requirements that extend for 12 months following termination of his employment with the Company.
A copy of the Separation Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The above description of the material terms of the Separation Agreement is qualified in its entirety by reference to such exhibit.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
