Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.
Appointment of Michael R. Haack to Board of Directors
On June 19, 2019, the Board of Directors (the “Board”) of Eagle Materials Inc. (the “Company”) expanded the size of the Board from nine to ten directors and appointed Michael R. Haack to serve as a Class III director, effective immediately, with a term to expire at the 2021 annual stockholders’ meeting.
Mr. Haack is the Company’s President and Chief Operating Officer, who will succeed David B. Powers as the Company’s Chief Executive Officer when Mr. Powers retires from the role on July 1, 2019. Mr. Haack joined the Company as Executive Vice President and Chief Operating Officer in December 2014. Previously, Mr. Haack was employed at Haliburton Energy Services for 17 years, most recently as Global Operations Manager at Halliburton’s Sperry Drilling Division. Mr. Haack will not receive additional compensation for his service as a member of the Board.
Approval of Change in Control Agreements
On June 19, 2019, the Board approved change in control continuity agreements with the following named executive officers: Mr. Haack; D. Craig Kesler, the Company’s Executive Vice President – Finance and Administration & Chief Financial Officer; Robert S. Stewart, the Company’s Executive Vice President – Strategy, Corporate Development and Communications; and James H. Graass, the Company’s Executive Vice President, General Counsel and Secretary.
The change in control continuity agreements provide that, in the event of a change in control during the term, atwo-year protection period will commence during which the relevant executive will be entitled to compensation and benefits on terms that are generally no less favorable than those that applied prior to the change in control. In the event of the executive’s involuntary termination of employment without cause or resignation for good reason during thetwo-year protection period, subject to the execution of a release of claims, he would be entitled to (a) cash severance equal to the product of (i) a severance multiple of 3 (for Mr. Haack), 2.5 (for Mr. Kesler) or 2 (for Messrs. Stewart and Graass),multiplied by (ii) the sum of his annual base salary and target annual bonus; (b) a prorated annual bonus for the year of termination; (c) a payment in lieu of employer retirement savings plan contributions that he would have received had his employment continued for 18 months (for Mr. Haack), 15 months (for Mr. Kesler) or 12 months (for Messrs. Stewart and Graass) post-termination; (d) a payment equal to the premium for continued participation in health insurance plans for 18 months (for Mr. Haack), 15 months (for Mr. Kesler) or 12 months (for Messrs. Stewart and Graass) post-termination; and (e) outplacement benefits of up to $30,000. The change in control continuity agreements subject the executives to a perpetual confidentiality covenant and noncompetition covenants for 18 months (for Mr. Haack), 15 months (for Mr. Kesler) or 12 months (for Messrs. Stewart and Graass) post-termination. If any payments or benefits under the change in control continuity agreements would be subject to Sections 280G and 4999 of the Internal Revenue Code, such payments or benefits would be reduced to the extent that such reduction would place the executive in a betterafter-tax position. The initial term of the change in control continuity agreements is three years from the effective date of June 20, 2019, subject to automatic renewal for an additional year on each anniversary of the effective date.
The foregoing summary of the change in control continuity agreements does not purport to be complete and is qualified in its entirety by reference to the change in control continuity agreements with Messrs. Haack, Kesler, Stewart and Graass, which are attached to this Current Report on Form8-K as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively.
Approval of Advisory Agreement
On June 19, 2019, the Board approved an advisory agreement with Mr. Powers in connection with his retirement, effective July 1, 2019, pursuant to which Mr. Powers has agreed to provide advisory services to the Company during the period from his retirement date until March 31, 2020. The advisory services include providing support, advice, and counsel to the Company’s Chief Executive Officer regarding all aspects of the Company’s businesses; consulting with the Chief Executive Officer, including with regard to leadership transition; assisting the
