Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 26, 2021, William J. Sandbrook advised the Company that he will retire from the Board at the Company’s 2021 annual meeting of stockholders (the “2021 Meeting”) and will not stand for re-election at the 2021 Meeting. Mr. Sandbrook previously served as the Company’s Chairman of the Board from May 2018 through May 14, 2020, as the Company’s Chief Executive Officer and director from August 2011 through April 3, 2020, and as the Company’s President from August 2011 until April 2019. There are no disagreements between Mr. Sandbrook and the Company on any matter relating to the Company’s operations, policies or practices.
Mr. Sandbrook’s Executive Transition Agreement
Mr. Sandbrook entered into an Executive Transition Agreement with the Company, dated February 13, 2020 (the “Executive Transition Agreement”), and effective as of April 3, 2020, in connection with his retirement as the Company’s Chief Executive Officer. Mr. Sandbrook and the Company have extended the Executive Transition Agreement through April 2, 2023 (the “Transition Period”), pursuant to an amendment to the Executive Transition Agreement dated March 26, 2021 (the “Amendment”).
Pursuant to the Executive Transition Agreement and the Amendment, Mr. Sandbrook will continue to serve as a consultant to the Company. As compensation for his services during the Transition Period, Mr. Sandbrook will receive an annual fee of $450,000 in cash, which will be paid in substantially equal monthly installments (the “Annual Fee”).
If Mr. Sandbrook terminates his consulting services or is terminated by the Company for Cause (as defined in the Executive Transition Agreement), he will receive no compensation beyond the date of such termination. If Mr. Sandbrook is terminated by the Company without Cause, he will be eligible to receive (i) a lump-sum amount equal to the remaining portion of the
Annual Fee that would have otherwise been paid to Mr. Sandbrook from the date of termination through April 2, 2023, and (ii) the continuation of his health and welfare benefits under the Executive Transition Agreement through October 3, 2022. All payments and benefits related to a termination without Cause are contingent upon Mr. Sandbrook executing an updated general release of claims within forty-five (45) days after such termination.
Additionally, in the event of a Change in Control (as defined in the Executive Transition Agreement) during the Transition Period, Mr. Sandbrook shall be entitled to (i) a lump-sum amount equal to the remaining portion of the Annual Fee that would have otherwise been paid to Mr. Sandbrook from the date of the Change of Control through April 2, 2023, and (ii) the continuation of his health and welfare benefits under the Executive Transition Agreement through October 3, 2022.
Pursuant to the Executive Transition Agreement, Mr. Sandbrook agreed to waive any and all claims he may have against the Company and not to compete with the Company during the term of the agreement. The Executive Transition Agreement also contains customary non-solicitation and non-interference provisions that apply for the duration of the agreement and an indefinite non-disparagement provision.
The foregoing description is qualified in its entirety by reference to the Amendment attached hereto as Exhibit 10.1, which is incorporated herein by reference.