SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): January 1,
2018
General Finance Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
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001-32845
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32-0163571
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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39 East Union Street
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Pasadena, California
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91103
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(Address of Principal Executive Offices)
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(Zip Code)
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(626) 584-9722
(Registrant’s Telephone Number, Including Area
Code)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the Registrant
under any of the following provisions (See General Instruction A.2
below):
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Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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EXPLANATORY NOTES
Certain References
References to “we,” “us,”
“our” or the “Company” refer to General
Finance Corporation, a Delaware corporation (“GFN”),
and its consolidated subsidiaries.
These subsidiaries
include GFN U.S. Australasia Holdings, Inc., a Delaware corporation
(“GFN U.S.”); GFN Insurance Corporation, an Arizona
corporation (“GFNI”); GFN North America Leasing
Corporation, a Delaware corporation (“GFNNA Leasing”);
GFN North America Corp., a Delaware corporation
(“GFNNA”); GFN Realty Company, LLC, a Delaware limited
liability company (“GFNRC”);
GFN Manufacturing Corporation, a Delaware
corporation (“GFNMC”), and its subsidiary, Southern
Frac, LLC, a Texas limited liability company (collectively
“Southern Frac”);
Pac-Van, Inc., an Indiana
corporation, and its Canadian subsidiary,
PV Acquisition Corp., an Alberta corporation
(collectively “Pac-Van”); and Lone Star Tank Rental
Inc., a Delaware corporation (“Lone Star”);
GFN
Asia Pacific Holdings Pty Ltd, an Australian corporation
(“GFNAPH”), and its subsidiaries, GFN Asia Pacific
Finance Pty Ltd, an Australian corporation (“GFNAPF”),
Royal Wolf Holdings Limited, an Australian corporation
(“RWH”), and its Australian and New Zealand
subsidiaries (collectively, “Royal Wolf”)
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TABLE OF CONTENTS
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Page
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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers
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1
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Item 9.01
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Financial Statements and Exhibits
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3
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Exhibit 10.1
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Valenta Employment Agreement dated January 1, 2018
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Exhibit 10.2
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Miller Employment Agreement dated January 1, 2018
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Item 1.01
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Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers
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Ronald Valenta Appointed Executive Chairman of the
Board
Mr.
Ronald Valenta, age 59, resigned as the Chief Executive Officer of
General Finance Corporation (the “Company”) effective
January 1, 2018. The board of directors (the “Board”)
of the Company appointed Mr. Valenta as the Executive Chairman of
the Board effective as of January 1, 2018. The Company and Mr.
Valenta entered into an employment agreement effective January 1,
2018, a copy of which is filed herewith as Exhibit 10.1 and
incorporated herein by reference (the “Valenta Employment
Agreement”). The following description of the Valenta
Employment Agreement is qualified in its entirety by the Valenta
Employment Agreement.
Under
the Valenta Employment Agreement, Mr. Valenta will serve as the
Executive Chairman of the Board commencing on January 1, 2018. The
Valenta Employment Agreement will continue until terminated by one
of the parties or by its terms. The Valenta Employment Agreement
provides that the Company will pay Mr. Valenta a base salary of
$240,000 (the “Valenta Base Salary”), and the Valenta
Base Salary will be reviewed annually. Mr. Valenta will be eligible
for a quarterly bonus of $46,250 and an annual performance bonus
for fiscal year 2018 and every year thereafter as determined by the
Board and the Compensation Committee. Mr. Valenta will be eligible
for equity awards under the Company’s Amended and Restated
2014 Stock Incentive Plan (the “Plan”) that are granted
to Board members. The Company will pay Mr. Valenta a monthly
automobile allowance of $2,500 and will reimburse Mr. Valenta for
reasonable work-related expenses. The Company will pay for the
medical and dental benefits of Mr. Valenta and his immediate
family. Mr. Valenta will receive certain other benefits, including
participating in all employee benefit plans.
Under
the Valenta Employment Agreement, Mr. Valenta agrees, to the
fullest extent provided by law, to repay or forfeit any bonus,
incentive payment, equity award or other compensation if each of
the three elements is satisfied: (i) the payment, grant or vesting
of such compensation was based upon the achievement of financial
results that were subsequently the subject of a restatement of
financial statements of the Company filed with the Securities and
Exchange Commission (“SEC”), or the amount of the award
was based upon the achievement of financial results which
subsequently were determined to have been overstated; (ii) the
Board determines in its reasonable discretion, exercised in good
faith, that Mr. Valenta engaged in fraud, intentional misconduct or
an intentional violation of law or the Company policy that caused
or contributed to the need for the restatement or caused or
contributed to the overstatement of the financial results; and
(iii) the Board determines in its reasonable discretion, exercised
in good faith, that it is in the best interests of the Company and
its stockholders for Mr. Valenta to repay or forfeit all or any
portion of the bonus, incentive payment, equity award or other
compensation.
The
Company may terminate the Valenta Employment Agreement for Cause
(as defined in the Valenta Employment Agreement), including: (i)
the breach by Mr. Valenta of any obligation, duty or agreement
under the Valenta Employment Agreement, which breach is not cured
or corrected within 15 days of written notice thereof from the
Company; (ii) Mr. Valenta’s commission of any act of personal
dishonesty, fraud, breach of fiduciary duty or trust; (iii) Mr.
Valenta’s conviction of, or plead guilty or nolo contendere
with respect to, theft, fraud, a crime involving moral turpitude,
or a felony under federal or applicable state law; (iv) Mr.
Valenta’s commission of any act of personal conduct that, in
the reasonable opinion of the Board, gives rise to a material risk
of liability under federal or applicable state law for
discrimination or sexual or other forms of harassment or other
similar liabilities to subordinate employees; (v) Mr.
Valenta’s commission of continued and repeated substantive
violations of specific written directions of the Board or continued
and repeated substantive failure to perform duties assigned by or
pursuant to the Valenta Employment Agreement; (vi) Mr.
Valenta’s engagement in conduct that is demonstrably and
materially injurious to the Company and the corporations and legal
entities controlled by the Company (the “Company
Group”), or that materially harms the reputation or financial
position of the Company Group, unless the conduct in question was
undertaken in good faith on an informed basis with due care and
with a rational business purpose and based upon the honest belief
that such conduct was in the best interest of the Company Group;
(vii) Mr. Valenta is found liable in any SEC or other civil or
criminal securities law action or entering any cease and desist
order with respect to such action where the conduct that is the
subject of such action is injurious to the Company Group; (viii)
Mr. Valenta (1) obstructs or impedes, (2) endeavors to influence,
obstruct or impede, or (3) fails to materially cooperate with, any
investigation authorized by the Board or any governmental or
self-regulatory entity; or (ix) Mr. Valenta makes any material
misrepresentations (or omissions) in connection with his resume and
other documents which may have been provided by Mr. Valenta, and
oral statements regarding his employment history, education and
experience, in determining to enter into the Valenta Employment
Agreement.
Mr.
Valenta may terminate the Valenta Employment Agreement for
“Good Reason” (as defined in the Valenta Employment
Agreement) including upon (a) a reduction in his Valenta Base
Salary; (b) the assignment to Mr. Valenta of duties and
responsibilities that are materially beneath those of an executive
chairman and provided that he notifies the Company within five
business days of the assignment of such duties that he believes are
the basis of termination of his employment for Good Reason and the
Company does not revoke such duties and responsibilities. Mr.
Valenta is entitled to severance payments equal to one year of the
Valenta Base Salary if his employment is terminated for Good Reason
or there is a change of control of the Company (as defined in the
Valenta Employment Agreement).
Jody Miller Appointed Chief Executive Officer
On
January 1, 2018, the Board appointed Mr. Jody Miller, age 50, the
Chief Executive Officer of the Company, replacing Mr. Valenta who
previously served as the Company’s Chief Executive Officer.
Mr. Miller has served as the Company’s President since
January 2017 and as its Executive Vice President from June 2015 to
January 2017. Since July 2017, Mr. Miller has served as the
President of Southern Frac LLC, the Chief Executive Officer of GFN
Manufacturing Corporation and GFN North America Corp. and the Chief
Executive Officer of Lone Star Tank Rental Inc. Mr. Miller
has also served as the Chief Executive Officer of GFN North America
Leasing Corporation since June 2016. Mr. Miller has served as
director of GFN Manufacturing Corporation, Lone Star Tank Rental
Inc., GFN North America Leasing Corporation, GFN U.S. Australasia
Holdings, Inc. and Royal Wolf Holdings Limited since June 2014,
September 2014, June 2016, June 2016 and July 2016,
respectively. Mr. Miller served as a consultant to GFN
Manufacturing Corporation from May 2013 to June
2015. Mr. Miller has over 25 years of experience in the
equipment rental industry, including from December 2008 to May 2013
as Mobile Mini, Inc.’s Executive Vice President and Chief
Operations Officer, five years at Mobile Storage Group, Inc. as
Senior Vice President and fifteen years at RSC Holdings, Inc. where
he held many positions including Regional Vice President for seven
years.
Mr. Miller and the Company entered into an
employment agreement dated January 1, 2018,
a copy of which is filed herewith as Exhibit 10.2
and incorporated herein by reference (the “Miller Employment
Agreement”). The following description of the Miller
Employment Agreement is qualified in its entirety by the Miller
Employment Agreement.
Under the Miller Employment Agreement, Mr. Miller
will serve as the Chief Executive Office and President of the
Company commencing on January 1, 2018, and the Miller Employment
Agreement will continue until terminated by one of the parties or
by its terms. The Miller Employment Agreement provides that the
Company will pay Mr. Miller a base salary of $335,000 per year for
the remaining six months of fiscal year 2018, $400,000 per year
for
fiscal year 2019 and $425,000 per year for fiscal year
2020.
The base salary will thereafter
be determined annually. Mr. Miller will be eligible for an annual
performance bonus of up to $250,000, $300,000 and $350,000 for
fiscal years 2018, 2019 and 2020, respectively, subject to the
terms and conditions of the Company’s performance bonus plan
and as the Compensation Committee may determine. Mr. Miller will be
granted restricted shares of the Company with an aggregate value of
$335,000 each fiscal year the Miller Employment Agreement is in
effect, one-third of which will vest on each of the first three
anniversaries of the date of grant. The Company will pay Mr. Miller
a monthly automobile allowance, and will pay for the medical and
dental benefits of Mr. Miller and his immediate family, and Mr.
Miller will receive certain other benefits including participating
in all employee benefit plans, vacation and sick
leave.
Under
the Miller Employment Agreement, Mr. Miller agrees, to the fullest
extent provided by law, to repay or forfeit any bonus, incentive
payment, equity award or other compensation if each of the three
elements is satisfied: (i) the payment, grant or vesting of such
compensation was based upon the achievement of financial results
that were subsequently the subject of a restatement of financial
statements of the Company filed with the SEC, or the amount of the
award was based upon the achievement of financial results which
subsequently were determined to have been overstated; (ii) the
Board determines in its reasonable discretion, exercised in good
faith, that Mr. Miller engaged in fraud, intentional misconduct or
an intentional violation of law or the Company policy that caused
or contributed to the need for the restatement or caused or
contributed to the overstatement of the financial results; and
(iii) the Board determines in its reasonable discretion, exercised
in good faith, that it is in the best interests of the Company and
its stockholders for Mr. Miller to repay or forfeit all or any
portion of the bonus, incentive payment, equity award or other
compensation.
The Company may terminate the Miller Employment
Agreement for “Cause” (as defined in the Miller
Employment Agreement), including: (i) the breach by Mr. Miller of
any obligation, duty or agreement under the Miller Employment
Agreement, which breach is not cured or corrected within
15 days of written notice thereof from the Company; (ii) Mr.
Miller’s commission of any act of personal dishonesty, fraud,
breach of fiduciary duty or trust; (iii) Mr. Miller’s
conviction of, or plead guilty or nolo contendere with respect to,
theft, fraud, a crime involving moral turpitude, or a felony under
federal or applicable state law; (iv) Mr. Miller’s commission
of any act of personal conduct that, in the reasonable opinion of
the Board, gives rise to a material risk of liability under federal
or applicable state law for discrimination or sexual or other forms
of harassment or other similar liabilities to subordinate
employees;
(v) Mr.
Miller’s commission of continued and repeated substantive
violations of specific written directions of the Board or continued
and repeated substantive failure to perform duties assigned by or
pursuant to the Miller Employment Agreement; (vi) Mr.
Miller’s engagement in conduct that is demonstrably and
materially injurious to the Company and the Company Group, or that
materially harms the reputation or financial position of the
Company Group, unless the conduct in question was undertaken in
good faith on an informed basis with due care and with a rational
business purpose and based upon the honest belief that such conduct
was in the best interest of the Company Group; (vii) Mr. Miller is
found liable in any SEC or other civil or criminal securities law
action or entering any cease and desist order with respect to such
action where the conduct that is the subject of such action is
injurious to the Company Group; (viii) Mr. Miller (1) obstructs or
impedes, (2) endeavors to influence, obstruct or impede, or (3)
fails to materially cooperate with, any investigation authorized by
the Board or any governmental or self-regulatory entity; or (ix)
Mr. Miller makes any material misrepresentations (or omissions) in
connection with his resume and other documents which may have been
provided by Mr. Miller, and oral statements regarding his
employment history, education and experience, in determining to
enter into the Miller Employment Agreement.
Mr.
Miller may terminate the Miller Employment Agreement for
“Good Reason” (as defined in the Miller Employment
Agreement) including upon (a) a reduction in his base salary; (b)
the assignment to Mr. Miller of duties and responsibilities that
are materially beneath those of a chief executive officer and
president, provided that Mr. Miller notifies the Company within
five business days of the assignment of such duties that Mr. Miller
believes are the basis of termination of his employment for Good
Reason and the Company does not revoke such duties and
responsibilities. Mr. Miller is entitled to severance payments
equal to one year’s base salary if his employment is
terminated for Good Reason.
There
are no other agreements or understandings pursuant to which Mr.
Miller was selected as the Chief Executive Officer and President.
There are no family relationships among any of our directors,
executive officers and Mr. Miller. There are no related party
transactions between the Company and Mr. Miller which are
reportable under Item 404(a) of Regulation S-K.
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Item 9.01
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Financial Statements and Exhibits
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Exhibit
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Exhibit
Description
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10.1
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Valenta Employment Agreement dated January 1, 2018
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10.2
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Miller Employment Agreement dated January 1, 2018
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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GENERAL FINANCE CORPORATION
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Dated: January 3, 2018
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By:
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/s/ CHRISTOPHER A. WILSON
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Christopher A. Wilson
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General Counsel, Vice President and Secretary
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EXHIBIT INDEX
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Exhibit
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Number
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Exhibit Description
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Valenta Employment Agreement dated January 1, 2018
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Miller Employment Agreement dated January 1, 2018
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EXHIBIT
10.1
January
1, 2018
Mr.
Ronald F. Valenta
5200
Jessen Drive
La
Cañada, CA 91011
Dear
Ron:
General
Finance Corporation (the “
Company
”) is pleased to
confirm the terms of your employment agreement (this
“
Agreement
”) under which
you will serve as the Executive Chairman of the Board of Directors
of the Company (the “
Board
”) commencing on
January 1, 2018. The Company is listed on The NASDAQ Stock Market.
We believe the position of Executive Chairman will be rewarding and
focused upon, but not limited to, the traditional areas of
mentoring our new Chief Executive Officer (“
CEO
”), assisting the CEO
in completing his strategic plan and advising on capital allocation
and procurement.
Your
employment will be on the following terms and
conditions:
1.
Title
and Responsibilities
1.1
You will serve as
Executive Chairman of the Company effective January 1, 2018.
Your
duties and responsibilities shall be those normally and customarily
vested in an Executive Chairman, as incident to the duties set
forth herein and as set forth in the Bylaws of the Company. Some of
your duties are listed on Exhibit A.
1.2
You agree to obey
all rules, regulations and special instructions of the Company and
all other rules, regulations, guides, handbooks, procedures,
policies and special instructions applicable to the Company’s
business in connection with your duties hereunder and you shall
endeavor to improve your ability and knowledge of the
Company’s business in an effort to increase the value of your
services for the mutual benefit of the Company and
you.
1.3
You will perform
your responsibilities principally at the executive offices of the
Company.
2.
Base Salary
. Your base salary
(“
Base
Salary
”) will continue at $240,000 per year, payable
in bimonthly installments less applicable tax withholding; the Base
Salary will be reviewed annually.
3
.
Bonus
.
No later than the 15
th
day of the second
month of equal quarter, you will be eligible for a quarterly bonus
of $46,250 and an annual performance bonus for fiscal year 2018 and
every year thereafter as determined by the Company’s Board
and Compensation Committee.
4.
Equity Incentives
. The Company
has adopted the Amended and Restated 2014 Stock Incentive Plan
(this plan, as it may be amended, supplemented or superseded by any
other stock incentive plans, the “
Plan
"). The Plan authorizes the
grant of stock options, share appreciation rights, restricted
shares, restricted share units, unrestricted shares, deferred share
units and performance and cash-settled awards (each of the
foregoing, an “
Award
” and collectively,
the “
Awards
”). The Committee
shall have discretion to determine the value of any Awards other
than restricted shares granted under this Section 4. Under this
Agreement you will receive Awards granted to Board
members.
5.
Reimbursement of Expenses
. The
Company shall pay you a monthly allowance of $2,500 per month. You
will be reimbursed for reasonable and necessary work-related
expenses, including but not limited to, phone charges, travel
expenses, desk top computer, and other reasonable and necessary
work-related costs will be borne by the Company.
6.
Employee Benefits
. You will be
entitled to participate on the same basis in all offered benefits
or programs as any other employee of the Company for medical
insurance and retirement programs. Medical and dental benefits will
be provided to you and your immediate family at no cost to
you.
7.
Term and Termination of
Employment
. Your new duties and responsibilities will
commence on January 1, 2018 (or such other date as may be agreed
between you and the Company) and will terminate on the earliest to
occur of the following:
7.1
upon your
death;
7.2
upon the delivery
to you of written notice of termination by the Company if you shall
suffer a physical or mental disability which renders you unable to
perform your duties and obligations under this Agreement for either
60 consecutive days or 120 days in any 12-month
period;
7.3
upon 30 days’
written notice from you to the Company;
7.4
upon written notice
from you to the Company for one or more of the following effected
without your written consent (“
Good Reason
”), provided
that such notice is received within 90 days of the event or
circumstance constituting Good Reason: (a) a reduction in your Base
Salary; (b) you are assigned duties and responsibilities that are
materially beneath those of an executive chairman and provided that
you notify the Company within five business days of the assignment
of such duties that you believe are the basis of termination of
your employment for Good Reason and the Company does not revoke
such duties and responsibilities;
7.5
upon delivery to
you of written notice of termination by the Company (i) For
Cause, or (ii) without cause following receipt of written
notice of termination from you pursuant to Section 7.3 of this
Agreement; or
7.6
upon delivery to
you of written notice of termination by the Company without
cause.
8.1
Upon termination of
your employment for any reason, you shall not be entitled to any
severance, except that if you terminate your employment for Good
Reason or there is a change of control of the Company (change of
control is defined as the majority of the Company’s
outstanding shares are purchased by another investor(s)), or the
Company terminates your employment without cause, you shall be
entitled to a lump sum severance payment equal to 12 months’
Base Salary as in effect on the date of termination (but prior to
any reduction in salary that entitled you to terminate your
employment for Good Reason) provided that you execute and deliver
to the Company, and do not revoke, a written release (the
“
Release
”), in form and
substance satisfactory to the Company, of any and all claims
against the Company and its subsidiaries, directors, officers and
affiliates with respect to all matters arising out of your
employment by the Company. The Company shall be entitled to defer
payment of any amounts under this Section 8 until the expiration of
any period during which you shall have the right to revoke the
Release.
8.2
Notwithstanding the
timing of payments set forth in this Agreement, if the Company
determines that you are a “specified employee” within
the meaning of Section 409A of the Internal Revenue Code of 1986,
as amended, and that, as a result of such status, any portion of
the payment under this Agreement would be subject to additional
taxation, the Company will delay paying any portion of such payment
until the earliest permissible date on which payments may commence
without triggering such additional taxation (with such delay not to
exceed six months), with the first such payment to include the
amounts that would have been paid earlier but for the above
delay.
9.
Certain Definitions
. For
purposes of this Agreement, the following capitalized terms have
the following meanings:
9.1
“
For Cause
” shall mean, in
the context of a basis for termination of your employment with the
Company, that:
9.1.1
you
breach any obligation, duty or agreement under this Agreement,
which breach is not cured or corrected within 15 days of
written notice thereof from the Company; or
9.1.2
you
commit any act of personal dishonesty, fraud, breach of fiduciary
duty or trust; or
9.1.3
you
are convicted of, or plead guilty or
nolo contendere
with respect to, theft,
fraud, a crime involving moral turpitude, or a felony under federal
or applicable state law; or
9.1.4
you
commit any act of personal conduct that, in the reasonable opinion
of the Board, gives rise to a material risk of liability under
federal or applicable state law for discrimination or sexual or
other forms of harassment or other similar liabilities to
subordinate employees; or
9.1.5
you commit continued and
repeated substantive violations of specific written directions of
the Board, which directions are consistent with this Agreement and
your position as Executive Chairman, or continued and repeated
substantive failure to perform duties assigned by or pursuant to
this Agreement; provided that no discharge shall be deemed For
Cause under this subsection 9.1.5 unless you first receive written
notice from the Company advising you of the specific acts or
omissions alleged to constitute violations of written directions or
a material failure to perform your duties, and such violations or
material failure continue after you shall have had a reasonable
opportunity to correct the acts or omissions so complained of;
or
9.1.6
you
engage in conduct that is demonstrably and materially injurious to
the Company Group (as defined below), or that materially harms the
reputation or financial position of the Company Group (as defined
below), unless the conduct in question was undertaken in good faith
on an informed basis with due care and with a rational business
purpose and based upon the honest belief that such conduct was in
the best interest of the Company Group (as defined below);
or
9.1.7
you
are found liable in any Securities and Exchange Commission
(“
SEC
”)
or other civil or criminal securities law action or entering any
cease and desist order with respect to such action (regardless of
whether or not you admit or deny liability) where the conduct that
is the subject of such action is demonstrably and materially
injurious to the Company Group (as defined below); or
9.1.8
you
(i) obstruct or impede, (ii) endeavor to influence, obstruct or
impede, or (iii) fail to materially cooperate with, any
investigation authorized by the Board or any governmental or
self-regulatory entity (an “
Investigation
”) (however,
your failure to waive attorney-client privilege relating to
communications with your own attorney in connection with an
Investigation shall not constitute “
Cause
”); or
9.1.9
you
made any material misrepresentations (or omissions) in connection
with your resume and other documents which may have been provided
by you, and oral statements regarding your employment history,
education and experience, in determining to enter into the
Agreement.
9.2
“
Company Group
” means the
Company and each corporation or entity controlled directly or
indirectly by the Company.
10.
Employment “At
Will
.” Nothing in this Agreement constitutes a promise
of continued employment or employment for a specified term. By
discussing the terms of employment with the Company outlined
herein, you agree and acknowledge that your employment relationship
with the Company would be at will.
11.
Non-Solicitation
. During the
period from the date your employment with the Company terminates
through the second anniversary of such date, you will not directly
or indirectly, either alone or by action in concert with others:
(a) induce or attempt to influence any employee of any member
of the Company Group to terminate his or her employment with any
member of the Company Group; (b) employ or offer employment to
any person who was employed by any member of the Company Group at
the time of termination of your employment with the Company; or
(c) induce or attempt to induce any customer, supplier,
licensee or other business relationship of any member of the
Company Group to cease or reduce its business with any member of
the Company Group, or in any way interfere with the relationship
between any such customer, supplier, licensee or business
relationship and any member of the Company Group; or
(d) solicit business from any of the Company’s
customers.
12.
Confidentiality
. You agree not
to disclose or use at any time (whether during or after your
employment with the Company) for your own benefit or purposes or
the benefit or purposes of any other person any non-public
information regarding the Company Group and its business,
operations, assets, financial condition and properties, including,
without limitation, trade secrets, business plans, policies,
pricing information and customer data, provided that the foregoing
covenant shall not restrict you from disclosing information to the
extent required by law. You agree that upon termination of your
employment with the Company for any reason, you will return to the
Company immediately all memoranda, books, papers, plans,
information, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company Group
except that you may retain personal notes, notebooks, diaries,
rolodexes and addresses and phone numbers. You further agree that
you will not retain or use for your account at any time any trade
names, trademark or other proprietary business designation used or
owned in connection with the business of any member of the Company
Group.
13.
Clawback
Provisions
. You agree to re
pay
or forfeit, to the fullest extent permitted by law, any
bonus, incentive payment, equity award or other compensation has
been awarded or received
if each of
the following three elements is satisfied:
13.1
the
payment, grant or vesting of such compensation was based upon the
achievement of financial results that were subsequently the subject
of a restatement of financial statements of the Company filed with
the SEC, or the amount of the award was based upon the achievement
of financial results which subsequently were determined to have
been overstated;
13.2
the
Board determines in its reasonable discretion, exercised in good
faith, that you engaged in fraud, intentional misconduct or an
intentional violation of law or the Company policy that caused or
contributed to the need for the restatement or caused or
contributed to the overstatement of the financial results;
and
13.3
the
Board determines in its reasonable discretion, exercised in good
faith, that it is in the best interests of the Company and its
stockholders for you to repay or forfeit all or any portion of
the
bonus, incentive payment, equity award or other
compensation
.
14.
Withholding
. The Company may
deduct from any compensation payable to you (including payments
made pursuant to Section 9 of this Agreement in connection with or
following termination of employment) amounts sufficient to cover
your share of applicable federal, state and/or local income tax
withholding, old-age and survivors’ and other Social Security
payments, state disability and other insurance premiums and
payments.
15.
Entire Agreement
. The foregoing
constitutes the entire agreement between you and the Company should
you elect to proceed. By ultimately accepting, you and the Company
are agreeing to be bound by the terms of this Agreement, and only
this Agreement. In other words, you are not accepting the offer
based on an understanding or promise, oral or written, which is not
contained in this Agreement, as this Agreement would represent the
entire agreement and understanding between you and the Company
regarding your employment with the Company should you proceed. Any
changes to the terms of this Agreement can only be in writing and
must be signed by you and either the President and Chief Executive
Officer or the Chairman of the Compensation Committee in order to
be valid and enforceable. Notwithstanding the foregoing, you
acknowledge that the Company has relied on your resume and other
documents which may have been provided by you, and oral statements
regarding your employment history, education and experience, in
determining to enter into the Agreement, and material
misrepresentations (or omissions) in connection with such documents
may constitute the basis of termination For Cause, as contemplated
by the definition of For Cause.
16.
Governing Law
. This Agreement
has been made and entered into in the State of California and shall
be construed in accordance with the laws of the State of
California.
17.
Captions
. The various captions
of this Agreement are for reference only and shall not be
considered or referred to in resolving questions of interpretation
of this Agreement.
18.
Counterparts
. This Agreement
may be executed in any number of counterparts, each of which shall
be deemed to be an original, but all of which together shall
constitute one and the same instrument.
We
believe that you would be a worthy addition to the Company and are
capable of making an outstanding contribution and that we, in turn,
can offer you a challenging and rewarding career. We look forward
to working together with you.
Very
truly yours,
GENERAL
FINANCE CORPORATION
Accepted and agreed as of
|
By
/s/ Susan L.
Harris
Susan
L. Harris
Chair
of the Compensation Committee
|
/s/ Ronald F.
Valenta
Ronald
F. Valenta
|
EXHIBIT
A
Description of Duties and Responsibilities
-
All activities,
responsibilities and authority related to the position of Executive
Chairman of the Board of Directors;
-
Call meetings of
the entire Board of Directors, quarterly or as deemed
necessary;
-
Review the agenda
for the Board sessions;
-
Preside over the
Board sessions;
-
Work closely with
the Lead Independent Director;
-
Annually review
succession planning of key senior managers and their likely
successors with the directors;
-
The Executive
Chairman should ensure the CEO, or their designee, should
coordinate the information flow to the directors, periodically
discuss director satisfaction with board materials with individual
directors to other suggestions on materials. Such information shall
be distributed at least one week in advance of regular Board
meetings and twenty-four hours in advance of any special
meeting;
-
Review the
CEO’s strategic plan and provide suggestions and/or
recommendations; and
-
Assist and advise
on capital allocation and procurements.
EXHIBIT
10.2
January
1, 2018
Mr.
Jody E. Miller
22307
Gable Road
Browning,
MO 64086
Dear
Jody:
General
Finance Corporation (the “
Company
”) is pleased to
confirm the terms of your employment agreement (this
“
Agreement
”) under which
you will serve as the Chief Executive Officer and President of the
Company commencing on January 1, 2018. The Company is listed on The
NASDAQ Stock Market. We believe the position of Chief Executive
Officer and President will be both challenging, rewarding and
focused upon, but not limited to, the traditional areas of
operations, sales, policies, marketing and management of executive
personnel and other projects as are necessary.
Your
employment will be on the following terms and
conditions:
1.
Title and
Responsibilities
1.1
You will serve as
the Chief Executive Officer and continue to serve as the President
of the Company effective January 1, 2018. You will report to the
Chairman and Board of Directors of the Company (the
“
Board
”). Your duties and
responsibilities shall be those normally and customarily vested in
a Chief Executive Officer and President, as incident to the duties
set forth herein and as set forth in the Bylaws of the Company.
Some of your duties are listed on Exhibit A. In addition, your
continuing and new duties shall include those duties and services
for the Company and its subsidiaries as the Board shall in its
discretion, from time to time, reasonably direct which are not
inconsistent with your responsibilities described in this Section
1.
1.2
You agree to obey
all rules, regulations and special instructions of the Company and
all other rules, regulations, guides, handbooks, procedures,
policies and special instructions applicable to the Company’s
business in connection with your duties hereunder and you shall
endeavor to improve your ability and knowledge of the
Company’s business in an effort to increase the value of your
services for the mutual benefit of the Company and
you.
2.
Base Salary
. Your base salary
(“
Base
Salary
”) will continue for the remaining six months of
the fiscal year ending June 30, 2018 to be $335,000 per year, then
for fiscal year 2019, the amount will increase to $400,000 and for
fiscal year 2020, the amount will increase to $425,000. Your Base
Salary will be payable in bimonthly installments less applicable
tax withholding; the Base Salary will be reviewed
annually.
3.
Bonus
. You will be eligible for
an annual performance target bonus of $250,000, $300,000 and
$350,000 for fiscal years 2018, 2019 and 2020, respectively (the
“
Target
Bonus
”), provided that you are employed by the Company
on the last day of such fiscal year and provided that, depending on
results, the actual bonus you are paid may be higher or lower than
the Target Bonus, as determined by the Compensation Committee. The
criteria for your Target Bonus will be determined by the
Compensation Committee and may include objective goals, such as
EBITDA and profit margin targets, providing a vision and strategic
plan of the Company and its subsidiaries, oversight of the other
Company executives and individual goals. Your completion of the
performance criteria and the amount of the actual bonus you receive
will be determined in the discretion of the Compensation
Committee.
The
Company’s Compensation Committee (the “
Committee
”) or the
Company’s Chairman will advise you each year of the criteria
upon which your Target Bonus and actual bonus will be determined
for each fiscal year.
4.
Equity Incentives
. The Company
has adopted the 2014 Stock Incentive Plan (this plan, as it may be
amended, supplemented or superseded by any other stock incentive
plans, the “
Plan
"). The Plan authorizes the
grant of stock options, share appreciation rights, restricted
shares, restricted share units, unrestricted shares, deferred share
units and performance and cash-settled awards (each of the
foregoing, an “
Award
” and collectively,
the “
Awards
”). The Committee
shall have discretion to determine the value of any Awards other
than restricted shares granted under this Section 4.
4.1
No later than July
1, 2018, the Company will grant you restricted shares of Company
common stock pursuant to the Plan with an aggregate value of
$335,000 which will vest in equal amounts on each of the first
three anniversaries of the date of grant, provided that you are
employed by the Company or one of its subsidiaries as of each of
the first three anniversaries. If the Committee is unable or elects
not to award restricted shares pursuant to the preceding sentence,
you agree to accept any Award which the Committee grants you to
satisfy the obligations of the Company described in the first
sentence of this Section 4.1.
4.2
Commencing on July
1, 2018 and no later than the first business day of July of each
subsequent year, the Company will grant you restricted shares of
Company common stock or other Awards pursuant to the Plan with an
aggregate value of $335,000 which will vest in equal installments
on each of the first three anniversaries of the date of grant,
subject to the attainment of vesting criteria established by the
Committee and provided that you are employed by the Company or one
of its subsidiaries as of each of the first three
anniversaries.
5.
Reimbursement of Expenses
. The
Company shall pay you a monthly automobile allowance of $650 per
month. You will be reimbursed for reasonable and necessary
work-related expenses, including but not limited to, phone charges,
travel expenses, laptop and desk top computer, and computer
time on the Company’s server; other reasonable and necessary
work-related costs will be borne by the Company.
6.
Employee Benefits
. You will be
entitled to participate on the same basis in all offered benefits
or programs as any other employee of the Company for medical
insurance and retirement programs. You will be eligible to
participate in the Company retirement plan after three months of
employment. Medical and dental benefits will be provided to you and
your immediate family at no cost to you.
7.
Vacation
. You shall be entitled
to 20 days paid vacation each year, which shall accrue monthly. You
shall have the right to carry over unused vacation to the extent
permitted by the Company’s policy from time to time in
effect. In all other respects, vacation shall be subject to the
Company’s vacation policies as set forth in the employee
handbook to be adopted.
8.
Term and Termination of
Employment
. Your employment will terminate on the earliest
to occur of the following:
8.1
upon your
death;
8.2
upon the delivery
to you of written notice of termination by the Company if you shall
suffer a physical or mental disability which renders you unable to
perform your duties and obligations under this Agreement for either
60 consecutive days or 120 days in any 12-month
period;
8.3
upon 30 days’
written notice from you to the Company;
8.4
upon written notice
from you to the Company for one or more of the following effected
without your written consent (“
Good Reason
”), provided
that such notice is received within 90 days of the event or
circumstance constituting Good Reason: (a) a reduction in your Base
Salary; (b) you are assigned duties and responsibilities that are
materially beneath those of a Chief Executive Officer and President
(considering in this regard the limited staffing the Company has
and expects to have in the future) and provided that you notify the
Company within five business days of the assignment of such duties
that you believe are the basis of termination of your employment
for Good Reason and the Company does not revoke such duties and
responsibilities;
8.5
upon delivery to
you of written notice of termination by the Company (i) for
Cause, or (ii) without Cause following receipt of written
notice of termination from you pursuant to Section 8.3 of this
Agreement; or
8.6
upon delivery to
you of written notice of termination by the Company without
Cause.
9.1
Upon termination of
your employment for any reason, you shall not be entitled to any
severance, except that if you terminate your employment for Good
Reason, or the Company terminates your employment without Cause,
you shall be entitled to a lump sum severance payment equal to 12
months’ Base Salary as in effect on the date of termination
(but prior to any reduction in salary that entitled you to
terminate your employment for Good Reason) provided that you
execute and deliver to the Company, and do not revoke, a written
release (the “
Release
”), in form and
substance satisfactory to the Company, of any and all claims
against the Company and its subsidiaries, directors, officers and
affiliates with respect to all matters arising out of your
employment by the Company. The Company shall be entitled to defer
payment of any amounts under this Section 9 until the expiration of
any period during which you shall have the right to revoke the
Release.
9.2
Notwithstanding the
timing of payments set forth in this Agreement, if the Company
determines that you are a “specified employee” within
the meaning of Section 409A of the Internal Revenue Code of 1986,
as amended, and that, as a result of such status, any portion of
the payment under this Agreement would be subject to additional
taxation, the Company will delay paying any portion of such payment
until the earliest permissible date on which payments may commence
without triggering such additional taxation (with such delay not to
exceed six months), with the first such payment to include the
amounts that would have been paid earlier but for the above
delay.
10.
Certain Definitions
. For
purposes of this Agreement, the following capitalized terms have
the following meanings:
10.1
For
“
Cause
”
shall mean, in the context of a basis for termination of your
employment with the Company, that:
10.1.1
you
breach any obligation, duty or agreement under this Agreement,
which breach is not cured or corrected within 15 days of
written notice thereof from the Company; or
10.1.2
you
commit any act of personal dishonesty, fraud, breach of fiduciary
duty or trust; or
10.1.3
you
are convicted of, or plead guilty or
nolo contendere
with respect to, theft,
fraud, a crime involving moral turpitude, or a felony under federal
or applicable state law; or
10.1.4
you
commit any act of personal conduct that, in the reasonable opinion
of the Board, gives rise to a material risk of liability under
federal or applicable state law for discrimination or sexual or
other forms of harassment or other similar liabilities to
subordinate employees; or
10.1.5
you commit continued and
repeated substantive violations of specific written directions of
the Board, which directions are consistent with this Agreement and
your position as Chief Executive Officer and President, or
continued and repeated substantive failure to perform duties
assigned by or pursuant to this Agreement; provided that no
discharge shall be deemed for Cause under this subsection 10.1.5
unless you first receive written notice from the Company advising
you of the specific acts or omissions alleged to constitute
violations of written directions or a material failure to perform
your duties, and such violations or material failure continue after
you shall have had a reasonable opportunity to correct the acts or
omissions so complained of; or
10.1.6
you
engage in conduct that is demonstrably and materially injurious to
the Company Group (as defined below), or that materially harms the
reputation or financial position of the Company Group (as defined
below), unless the conduct in question was undertaken in good faith
on an informed basis with due care and with a rational business
purpose and based upon the honest belief that such conduct was in
the best interest of the Company Group (as defined below);
or
10.1.7
you
are found liable in any Securities and Exchange Commission
(“
SEC
”)
or other civil or criminal securities law action or entering any
cease and desist order with respect to such action (regardless of
whether or not you admit or deny liability) where the conduct that
is the subject of such action is demonstrably and materially
injurious to the Company Group (as defined below); or
10.1.8
you
(i) obstruct or impede, (ii) endeavor to influence, obstruct or
impede, or (iii) fail to materially cooperate with, any
investigation authorized by the Board or any governmental or
self-regulatory entity (an “
Investigation
”) (however,
your failure to waive attorney-client privilege relating to
communications with your own attorney in connection with an
Investigation shall not constitute Cause); or
10.1.9
you
made any material misrepresentations (or omissions) in connection
with your resume and other documents which may have been provided
by you, and oral statements regarding your employment history,
education and experience, in determining to enter into the
Agreement.
10.2
“
Company
Group
” means the Company and each corporation or
entity controlled directly or indirectly by the
Company.
11.
Employment “At
Will
.” Nothing in this Agreement constitutes a promise
of continued employment or employment for a specified term. By
discussing the terms of employment with the Company outlined
herein, you agree and acknowledge that your employment relationship
with the Company would be at will.
12.
Non-Solicitation
. During the
period from the date your employment with the Company terminates
through the second anniversary of such date, you will not directly
or indirectly, either alone or by action in concert with others:
(a) induce or attempt to influence any employee of any member
of the Company Group to terminate his or her employment with any
member of the Company Group; (b) employ or offer employment to
any person who was employed by any member of the Company Group at
the time of termination of your employment with the Company; or
(c) induce or attempt to induce any customer, supplier,
licensee or other business relationship of any member of the
Company Group to cease or reduce its business with any member of
the Company Group, or in any way interfere with the relationship
between any such customer, supplier, licensee or business
relationship and any member of the Company Group; or
(d) solicit business from any of the Company’s
customers.
13.
Confidentiality
. You agree not
to disclose or use at any time (whether during or after your
employment with the Company) for your own benefit or purposes or
the benefit or purposes of any other person any non-public
information regarding the Company Group and its business,
operations, assets, financial condition and properties, including,
without limitation, trade secrets, business plans, policies,
pricing information and customer data, provided that the foregoing
covenant shall not restrict you from disclosing information to the
extent required by law. You agree that upon termination of your
employment with the Company for any reason, you will return to the
Company immediately all memoranda, books, papers, plans,
information, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company Group
except that you may retain personal notes, notebooks, diaries,
rolodexes and addresses and phone numbers. You further agree that
you will not retain or use for your account at any time any trade
names, trademark or other proprietary business designation used or
owned in connection with the business of any member of the Company
Group.
14.
Clawback
Provisions
. You agree to re
pay
or forfeit, to the fullest extent permitted by law, any
bonus, incentive payment, equity award or other compensation has
been awarded or received
if each of
the following three elements is satisfied:
14.1
the
payment, grant or vesting of such compensation was based upon the
achievement of financial results that were subsequently the subject
of a restatement of financial statements of the Company filed with
the SEC, or the amount of the award was based upon the achievement
of financial results which subsequently were determined to have
been overstated;
14.2
the
Board determines in its reasonable discretion, exercised in good
faith, that you engaged in fraud, intentional misconduct or an
intentional violation of law or the Company policy that caused or
contributed to the need for the restatement or caused or
contributed to the overstatement of the financial results;
and
14.3
the
Board determines in its reasonable discretion, exercised in good
faith, that it is in the best interests of the Company and its
stockholders for you to repay or forfeit all or any portion of
the
bonus, incentive payment, equity award or other
compensation
.
15.
Withholding
. The Company may
deduct from any compensation payable to you (including payments
made pursuant to Section 9 of this Agreement in connection with or
following termination of employment) amounts sufficient to cover
your share of applicable federal, state and/or local income tax
withholding, old-age and survivors’ and other Social Security
payments, state disability and other insurance premiums and
payments.
16.
Entire Agreement
. The foregoing
constitutes the entire agreement between you and the Company should
you elect to proceed. By ultimately accepting, you and the Company
are agreeing to be bound by the terms of this Agreement, and only
this Agreement. In other words, you are not accepting the offer
based on an understanding or promise, oral or written, which is not
contained in this Agreement, as this Agreement would represent the
entire agreement and understanding between you and the Company
regarding your employment with the Company should you proceed. Any
changes to the terms of this Agreement can only be in writing and
must be signed by you and either the President and Chief Executive
Officer or the Chairman of the Compensation Committee in order to
be valid and enforceable. Notwithstanding the foregoing, you
acknowledge that the Company has relied on your resume and other
documents which may have been provided by you, and oral statements
regarding your employment history, education and experience, in
determining to enter into the Agreement, and material
misrepresentations (or omissions) in connection with such documents
may constitute the basis of termination for Cause, as contemplated
by the definition of for Cause.
17.
Governing Law
. This Agreement
shall be construed in accordance with the laws of the State of
Delaware.
18.
Captions
. The various captions
of this Agreement are for reference only and shall not be
considered or referred to in resolving questions of interpretation
of this Agreement.
19.
Counterparts
. This Agreement
may be executed in any number of counterparts, each of which shall
be deemed to be an original, but all of which together shall
constitute one and the same instrument.
We
believe that you would be a worthy addition to the Company and are
capable of making an outstanding contribution and that we, in turn,
can offer you a challenging and rewarding career.
We look forward to continuing working together
with you.
Very
truly yours,
GENERAL
FINANCE CORPORATION
Accepted and agreed as
of
|
By
/s/ Susan L.
Harris
Susan
L. Harris
Chair
of the Compensation Committee
|
/s/ Jody E. Miller
Jody E.
Miller
|
EXHIBIT
A
Description of Duties and Responsibilities
- All
activities, responsibilities and authority related to the
position
of President and
Chief Executive Officer;
-
Responsible for company policies, procedures and
culture;
-
Responsible for company operations;
-
Responsible for company sales and marketing;
-
Member of the Executive Management Committee (EMC) and Board
of
Directors;
-
Reports to the Board of Directors; and
-
Anticipated Member of the GFN Board of Directors in December
2017.
