Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e)
On March 10, 2021, the Compensation and Leadership Development Committee of the Company's Board of Directors approved the terms, conditions and form of (i) Executive Severance and Change in Control Agreement and (ii) Amended and Restated Executive Severance and Change in Control Agreement (collectively, the “Executive Retention Agreements”), to be entered into with executive officers of the Company, including Daniel D. Springer, the Company’s President, Chief Executive Officer and principal executive officer; Cynthia Gaylor, the Company’s Chief Financial Officer and principal financial officer; and the following named executive officers: Scott V. Olrich, the Company’s Chief Operating Officer; Loren Alhadeff, the Company’s Chief Revenue Officer; and Trâm Phi, the Company’s Senior Vice President and General Counsel (such officers, collectively, the “Executives”). On March 11, 2021, the Company entered into the Executive Retention Agreement with Ms. Phi and expects to enter into Executive Retention Agreements with the other executive officers, including Mr. Springer, Ms. Gaylor, Mr. Olrich and Mr. Alhadeff.
The Executive Retention Agreements are not employment contracts and do not specify an employment term, compensation level or other terms and conditions of employment. The Executive Retention Agreements provide for certain severance benefits to an Executive in the event that his or her employment is terminated under specified circumstances as set forth in the Executive Retention Agreements. The Executive Retention Agreements are effective as of the date executed and in the case of Ms. Alhadeff, Ms. Gaylor, and Ms. Phi, will amend and restate each Executive’s existing Executive Severance and Change in Control Agreement.
If an Executive experiences a Qualifying Termination (as defined in the Executive Retention Agreement) outside a specified period, generally three months prior to and ending 12 months after a change in control (the “Change in Control Period”) and subject to certain conditions, including the Executive delivering a release of all employment related obligations of and claims and causes of action against the Company, the Company shall provide the Executive with the following severance benefits:
•Severance pay, in the form of a lump sum cash payment, less all applicable withholdings and deductions, an amount equal to six months of the Executive’s then-current base salary (12 months in the case of Mr. Springer) and 50% of the Executive’s target annual bonus for the performance year in which the Qualifying Termination occurs (100% of target bonus in the case of Mr. Springer).
•Continued employee benefits where the Company shall pay the Executive’s COBRA premiums for continuation of all health coverage for up to six months (12 months in the case of Mr. Springer).
•For the Executive’s then-outstanding equity compensation awards granted under the Company’s equity incentive plans (other than performance-based equity awards), six months’ vesting acceleration, effective as of the Executive’s termination date (12 months in the case of Mr. Springer).
•For the Executive’s then-outstanding equity compensation awards that otherwise only vest upon satisfaction of performance criteria, the vesting of such awards shall accelerate to the extent provided in the agreement(s) governing such award(s).
If an Executive experiences a Qualifying Termination (as defined in the Executive Retention Agreement) during the Change in Control Period and subject to certain conditions, including the Executive delivering a release of all employment related obligations of and claims and causes of action against the Company, the Company shall provide the Executive with the following severance benefits:
•Severance pay, in the form of a lump sum cash payment, less all applicable withholdings and deductions, an amount equal to 12 months of the Executive’s then-current base salary and none of the Executive’s target annual bonus for the performance year in which the Qualifying Termination occurs.
•Continued employee benefits where the Company shall pay the Executive’s COBRA premiums for continuation of all health coverage for up to 12 months.
•For the Executive’s then-outstanding equity compensation awards granted under the Company’s equity incentive plans (other than performance equity awards), full vesting acceleration, effective as of the Executive’s termination date.
•For the Executive’s then-outstanding equity compensation awards that otherwise only vest upon satisfaction of performance criteria, the vesting of such awards shall accelerate as set forth in the terms of the agreement(s) governing such award(s).
If there is a Change in Control without a Qualifying Termination, the vesting of each Executive’s equity awards (other than performance-based equity awards), shall accelerate as to 25% of any then-unvested shares subject to each such award as of immediately prior to the Change in Control (as defined in the Executive Retention Agreement). The foregoing acceleration shall not apply to any equity awards granted after the date the Executive entered into the Executive Retention Agreement. In the case of any performance-based equity awards, the achievement of any performance criteria upon a Change in Control shall be determined according to the applicable award agreement prior to the effect of this acceleration.
The Executive Retention Agreements are attached hereto as Exhibits 99.2 through 99.9 and are incorporated herein by reference. The foregoing summary is qualified entirely by reference to the full text of the Executive Retention Agreements.