Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 4, 2021, the Company and Mr. Sumoski entered into an Executive
Employment Agreement (the "Executive Employment Agreement"), effective
January 1, 2021, in connection with Mr. Sumoski's promotion to Chief Operating
Officer of the Company. The Executive Employment Agreement contains the entire
agreement of the parties and supersedes all prior agreements between the parties
related to Mr. Sumoski's employment with the Company, including that certain
Executive Employment Agreement by and between the Company and Mr. Sumoski
effective as of February 17, 2020.
Pursuant to the Executive Employment Agreement, Mr. Sumoski's annual base salary
increased to $605,000, effective January 1, 2021.
The Executive Employment Agreement also provides for the payment of a
non-compete benefit to Mr. Sumoski as consideration for compliance with the
confidentiality, non-competition, non-solicitation and other restrictive
covenants set forth in the Executive Employment Agreement. The non-compete
benefit is equal to one month of base salary for each year of service with the
Company (subject to a minimum of six months of base salary); provided, if
Mr. Sumoski is under age 55, the non-compete benefit will not be less than the
sum of the value of his forfeitable common stock units deferred and shares of
restricted stock awarded under the Company's long-term incentive plan. The
non-compete benefit will be paid to Mr. Sumoski in 24 equal monthly installments
following termination; provided, if Mr. Sumoski dies during the first 12 months
following his termination from employment, then Mr. Sumoski's estate will
receive monthly installments of the non-compete benefit only through the end of
the 12th month following his termination. No non-compete benefit is payable if
Mr. Sumoski dies while employed by the Company.
In lieu of the non-compete benefit described above, if Mr. Sumoski's employment
is involuntarily terminated by the Company or Mr. Sumoski resigns for Good
Reason (as defined in the Executive Employment Agreement), in either case within
24 months of a change in control of the Company, Mr. Sumoski would receive a
non-compete benefit, payable in a lump sum cash payment, equal to the sum of:
(a) a "base amount" multiplied by 2.5, with the "base amount" being equal to the
sum of (i) Mr. Sumoski's base salary and (ii) the greater of (A) 150% of
Mr. Sumoski's base salary and (B) the average performance award under the
Company's annual incentive plan for the three fiscal years prior to
Mr. Sumoski's termination of employment (provided for purposes of calculating
such average, the performance award under the annual incentive plan for any year
in such three-fiscal year period Mr. Sumoski did not hold his current position
will be equal to the performance award under the annual incentive plan for such
year for his position as a percentage of base salary multiplied by his base
salary); and
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(b) the value of the restricted stock units that would have been granted to
Mr. Sumoski in the year of termination based on the prior year's performance (if
not granted prior to the date of termination).
In addition, if Mr. Sumoski's employment is involuntarily terminated by the
Company or Mr. Sumoski resigns for Good Reason, in either case within 24 months
of a change in control of the Company, medical, dental and prescription drug
insurance coverage would be continued for 30 months.
The foregoing description of the terms and conditions of the Executive
Employment Agreement does not purport to be complete and is qualified in its
entirety by reference to the full text of the Executive Employment Agreement, a
copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by
reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
10.1 Executive Employment Agreement of David A. Sumoski (#)
104 Cover Page from this Current Report on Form 8-K, formatted in Inline XBRL
(included in Exhibit 101)
(#) Indicates a management contract or compensatory plan or arrangement.
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