Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On May 3, 2023, the Company announced that its President and Chief Executive Officer, Michael Burger, had informed the Company that he intended to retire as President and Chief Executive Officer of the Company, with the retirement to be effective July 1, 2023.
In connection with the Transition, on May 12, 2023 (the “Effective Date”), the Company and Mr. Burger entered into a transition and retirement agreement (the “Transition Agreement”). On and effective as of the Effective Date, Mr. Burger resigned as a member of the board of directors of the Company (the “Board”), and the Company reduced the size of the Board accordingly. Mr. Burger confirmed that his resignation from the Board was voluntary and not the result of any disagreement with or about the Company, its operations, policies or practices. Among other things, the Transition Agreement provides that:
•As of the Effective Date, Mr. Burger will continue to serve as the Company’s Chief Executive Officer until June 30, 2023 (the “Transition Date”).
•As of the Transition Date, Mr. Burger will transition to a Strategic Advisor role and provide advisory transitional services to the Company through June 30, 2024 (the “Scheduled Retirement Date,” the actual final day of such employment, the “Retirement Date,” and the period from the Effective Date through the Retirement Date, the “Transition Period”).
•During the Transition Period, Mr. Burger will continue to receive his current base salary. Mr. Burger also will remain eligible to receive his bonus under the Company’s short-term incentive plan (the “STIP”) for the 2023 annual performance period to be paid at the time the STIP bonuses are paid to other executives of the Company, subject to the terms and conditions of the STIP (the “2023 STIP Bonus”) and the timely effectiveness of a release of claims by Mr. Burger in favor of the Company and its related parties.
•Mr. Burger further will be entitled to participate in the STIP for the 2024 annual performance in accordance with the terms and conditions of the STIP and on such terms and conditions as determined by the Talent, Development and Compensation Committee of the Board consistent with terms and conditions applicable to senior executives of the Company. Any bonus payable under the STIP for such 2024 annual performance period (the “2024 STIP Bonus”) will be prorated for the portion of the year that Mr. Burger serves as Strategic Advisor and is subject to the timely effectiveness of a release of claims by Mr. Burger in favor of the Company and its related parties. The 2024 STIP Bonus, if earned, would be paid to Mr. Burger upon the later of the time STIP bonuses are paid to executives of the Company and the date no later than five (5) business days following effectiveness of such release of claims.
•Each of Mr. Burger’s outstanding equity awards will continue to vest during the Transition Period, subject to the terms and conditions of the Company’s 2014 Incentive Plan or 2022 Equity Incentive Plan (each, a “Plan”) under which the award was granted and the applicable award agreement thereunder (collectively, the “Equity Documents”). In addition, vesting of outstanding equity awards may accelerate as set forth, as applicable, under the Transition Agreement and the applicable Plan.
•Mr. Burger releases any claims in favor of the Company and its related parties, and Mr. Burger and the Company have agreed to mutual non-disparagement obligations.
In addition, pursuant to the Transition Agreement, Mr. Burger will be entitled to receive the following benefits if his employment is terminated by the Company without cause prior to the Scheduled Retirement Date:
•A lump sum payment equal to the base salary amount Mr. Burger would have otherwise received through the Scheduled Retirement Date.
•The 2023 STIP Bonus and 2024 STIP Bonus, as applicable, that Mr. Burger would have otherwise been entitled to receive if Mr. Burger is terminated prior to the payment of the 2023 STIP Bonus or 2024 STIP Bonus, as applicable.
•Company-paid or reimbursed premiums for medical, vision and dental coverage for Mr. Burger and his eligible dependents under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, for the period up to the Scheduled Retirement Date.
•Any outstanding equity award held by Mr. Burger will vest as to the portion of those equity awards that were otherwise scheduled to vest through the Scheduled Retirement Date, subject to the terms and conditions of the applicable Plan.
•Any outstanding equity award held by Mr. Burger will vest if his termination without cause occurs within 12 months following a change in control (within the meaning of the Company’s Key Executive Change in Control and Severance Plan) of the Company or if such change in control occurs before the Scheduled Retirement Date.
The foregoing summary and description of the Transition Agreement does not purport to be complete and is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the Transition Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.