Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Chief Financial Officer and Director
On December 27, 2019 David M. Khani, who has been serving as the Chief Financial
Officer and as a director of CONSOL Coal Resources GP LLC (the "General
Partner"), the general partner of CONSOL Coal Resources LP ("CCR" and,
collectively with the General Partner, the "Company"), notified the Company of
his intent to resign from his role as the Chief Financial Officer and director
of the General Partner, effective as of December 31, 2019. His resignation is
not the result of a disagreement or conflict with the Company or CONSOL Energy
Inc. ("CEIX"), the sole stockholder of the General Partner, or the General
Partner's board of directors (the "Board"). CEIX is currently pursuing a search
of an internal and, if necessary, external candidate to fill the chief financial
officer position.
Appointment of Director
CEIX appointed Martha A. Wiegand as a director of the General Partner, effective
as of January 2, 2020 to fill the vacancy on the Board resulting from
Mr. Khani's resignation. No arrangement or understanding exists between
Ms. Wiegand and any other person pursuant to which Ms. Wiegand was selected to
be a director of the General Partner. Ms. Wiegand does not have a direct or
indirect material interest in any transaction or arrangement in which the
Company is a participant.
Appointment of Interim Chief Financial Officer
The Board appointed Mitesh Thakkar as the General Partner's interim Chief
Financial Officer, effective as of January 1, 2020. Mr. Thakkar, age 40, has
served as Director of Finance and Investor Relations of both CEIX and CCR since
November 2017 and as Director of Finance and Investor Relations of CCR since May
2015. He previously served in various roles in the equity research department of
FBR Capital Markets (now part of B. Riley FBR, Inc.) from May 2007 through May
2015 where he provided equity research coverage for companies in the metals and
mining sector starting as an intern and moving up to VP, analyst from July 2011
to May 2015. Prior to his work at FBR, he served in various roles at Reliance
Engineering Associates (P) Limited from September 2002 through June 2006 moving
up to a manager leading project planning and controls for various petrochemical
and telecom-related projects. Mr. Thakkar holds a Bachelors of Engineering
(Mechanical) degree from the Maharaja Sayajirao University of Baroda and a
Masters in Business Administration degree from Texas A&M University.
No arrangement or understanding exists between Mr. Thakkar and any other person
pursuant to which Mr. Thakkar was selected to be an executive officer of the
General Partner and there is no family relationship between any director,
executive officer, or person nominated or chosen by the Company to become a
director or executive officer of the General Partner and Mr. Thakkar.
Mr. Thakkar does not have a direct or indirect material interest in any
transaction or arrangement in which the Company is a participant.
Severance and Change in Control Agreement with Mr. Thakkar
At the same time as his appointment as interim Chief Financial Officer of the
General Partner, Mr. Thakkar was also appointed to serve as the interim Chief
Financial Officer of CEIX, which is CCR's sponsor. CCR is a party to an omnibus
agreement with CEIX under which CCR reimburses CEIX on a monthly basis for
compensation-related expenses (including salary, bonus, incentive compensation
and other amounts) attributable to the portion of an executive's compensation
that is allocable to the General Partner. As a result of our 25% undivided
interest in the Pennsylvania Mining Complex, we reimburse CEIX for approximately
25% of the total compensation-related expenses (including salary, bonus,
incentive compensation and other amounts) incurred by CEIX and attributable to
our executive officers' compensation.
In connection with his appointment as the interim Chief Financial Officer of
CEIX, Mr. Thakkar entered into a new severance and double trigger change in
control agreement, which became effective on January 3, 2020 (the "CIC
Agreement"). The CIC Agreement provides for non-change in control severance
exclusively upon a termination of employment with CEIX absent "cause." The
amount of severance due is a 1x multiple of base salary payable in a single lump
sum. In the case of a change in control scenario, Mr. Thakkar is only entitled
to severance if following, or in connection with, a change in control
Mr. Thakkar's employment is terminated by CEIX absent "cause" or if Mr. Thakkar
resigns due to good reason within a finite period (either ninety days prior to a
change in control or within two years thereafter) also payable in a single lump
sum. Severance payable in a change in control is equal to a multiple of 1.5x of
base salary plus a multiple of 1.5x of incentive pay and provides certain other
benefits, including but not limited to continued health care coverage and
outplacement assistance.
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The purpose of the CIC Agreement is to ensure that CEIX and its affiliates
(a) offer a compensation package that is competitive with that offered by other
companies with whom CEIX and its affiliates compete for talent (b) retains and
relies upon the undivided focus of our senior executives immediately prior to,
during and following a change in control, and (c) diminishes the inevitable
distraction of our executive officers by virtue of personal uncertainties and
risks created by the potential job loss following a change in control. The CIC
Agreement also includes "double trigger" change in control provisions,
post-termination restrictive covenants relating to confidentiality,
non-competition and non-solicitation and relating to equity vesting and requires
Mr. Thakkar to sign an appropriate release of claims. The CIC Agreement does not
include any gross up feature arising from the excise tax payable on an excess
parachute payment.
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