Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On February 26, 2020, we entered into a certain Separation Agreement and Release
(the "Separation Agreement") with P. James Debney in connection with
Mr. Debney's separation from our company as President and Chief Executive
Officer and as a director of our company, which we previously reported in the
Current Report on Form 8-K filed with the Securities and Exchange Commission on
January 16, 2020.
Pursuant to the Separation Agreement, we will pay Mr. Debney severance pay and
other benefits as follows: (i) the amount of $83,333 per month for a period of
12 months after the Termination Date (as defined in the Severance Agreement);
(ii) reimbursement for Mr. Debney's cost to maintain coverage under our group
medical plans, pursuant to COBRA, for a period of 12 months after the
Termination Date; (iii) premiums required to maintain Mr. Debney's
company-provided life insurance as of the Termination Date in the amount of
$5.0 million for a period of 12 months after the Termination Date, or, in the
alternative, if such life insurance cannot be maintained to reimburse Mr. Debney
for the amount of premiums that would otherwise be payable to the insurer so
that Mr. Debney can either convert the coverage to an individual policy or buy
other insurance; (iv) a lump sum payment of $5,000 to reimburse Mr. Debney for
the costs of moving expenses to move his personal property out of our offices;
(v) extension of the exercise date for Mr. Debney's exercise of his options to
purchase 160,667 shares of our common stock at the price of $8.89 per share
under our 2013 Incentive Stock Plan to the earlier of July 31, 2020 or the day
prior to the effective date of our planned separation of our outdoor products
and accessories business from our firearm business; and (vi) vest Mr. Debney as
of the Termination Date in 44,731 of his currently unvested RSUs subject to the
delivery procedures applicable to Mr. Debney's currently vested RSUs, except
there will be no one-year hold requirement, provided that all other unvested
RSUs shall be terminated and of no effect. In addition, the Separation Agreement
includes mutual releases between our company and Mr. Debney, as well as
non-disparagement and confidentiality requirements binding upon Mr. Debney.
The separation, which occurred during our third fiscal quarter ended January 31,
2020, resulted in a reduction in general and administrative expenses for that
quarter by approximately $3.8 million. The Separation Agreement, which was
executed following the end of our third quarter, will result in an increase in
general and administrative expenses of approximately $1.6 million, most of which
will be recognized during our fourth fiscal quarter ending April 30, 2020.
Therefore, the impact in fiscal 2020 as a result of the separation and the
Separation Agreement is expected to be a net reduction in general and
administrative expenses of approximately $2.2 million.
The foregoing description of the Separation Agreement is a summary only and is
qualified in its entirety by reference to the Separation Agreement, a copy of
which is filed as Exhibit 10.117 to this Current Report on Form 8-K and
incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.117 Separation Agreement and Release, dated February 26, 2020, by and
between American Outdoor Brands Corporation and P. James Debney.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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