| | • | | an annual cash bonus under the Company’s Management Incentive Compensation Plan or a successor thereto (“MICP”), with a target bonus opportunity for the Company’s 2022 fiscal year equal to 150% of the approved weighted average payout percentage based on all metrics specified in the 2022 MICP, multiplied by his earned base salary in fiscal year 2022, and for subsequent fiscal years as determined by the Board; |
| | • | | a one-time promotion long-term incentive grant with an aggregate grant date value (as determined for financial reporting purposes) of $3.6 million; |
| | • | | annual grants of equity awards in forms and amounts to be determined annually by the Board, with a grant in December 2022 of awards under the Company’s 2022 Omnibus Award Plan or a successor thereto that result in a total fiscal year 2022 grant date value (determined for financial reporting purposes) of $6.75 million, and with respect to fiscal year 2023 a target long-term incentive award of no less than $9.25 million; and |
| | • | | employee benefits and perquisites provided to other senior executives of the Company pursuant to the Company’s compensation and benefit plans and arrangements, which may be amended from time to time. |
The Allan Letter Agreement has a term of two years, unless the Company and Mr. Allan mutually agree to extend it for a longer term. In the event that Mr. Allan’s employment is terminated by the Company before the expiration of the initial term without Cause (defined in the Allan Letter Agreement to include willful and continued failure to substantially perform his duties) or by Mr. Allan for Good Reason (defined in the Allan Letter Agreement to include a material adverse alteration by the Company of the nature or status of Mr. Allan’s responsibilities or Mr. Allan’s removal from the Board), Mr. Allan will be eligible to receive certain severance payments and benefits, subject to his executing a release of claims in favor of the Company and complying with certain restrictive covenants (including a two-year post-termination non-competition covenant, employee non-solicitation covenant and customer non-solicitation covenant, as well as a confidentiality covenant of indefinite duration) which will be applicable regardless of the reason for Mr. Allan’s termination of employment. Such severance payments and benefits will consist of (i) a lump sum cash severance payment equal to two (or, if such termination occurs after June 30, 2023 and before the expiration of the initial term, one) multiplied by the sum of base salary at termination and target annual cash bonus for the year of termination, and (ii) continued coverage under the Company’s medical, dental, life, vision and prescription drug plans after termination of employment until Mr. Allan reaches age 65.
The above description of the Allan Letter Agreement is a summary and is qualified in its entirety by reference to the Allan Letter Agreement as filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Loree Letter Agreement. Mr. Loree’s separation from service with the Company is considered a termination “other than for Cause” under the Letter Agreement, dated July 21, 2016, between the Company and Mr. Loree (the “Loree Letter Agreement”), and thus Mr. Loree will be eligible to receive certain severance payments and benefits as described in the Loree Letter Agreement, contingent upon his execution of a waiver and release of claims against the Company.
| Item 7.01 | Regulation FD Disclosure. |
On June 1, 2022, the Company issued a press release announcing the above changes to its management team. The press release also reaffirmed the Company’s financial outlook for full year 2022. A copy of the press release is being furnished as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 7.01 of this Current Report on Form 8-K is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), and shall not be incorporated or deemed to be incorporated by reference into any filing by the Company under the Securities Act of 1933 (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such filing.
Cautionary Statements Regarding Forward-Looking Statements
This current report on Form 8-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections or guidance of earnings and revenue or other financial items; any statements of the plans, strategies and objectives of
