Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On June 25, 2020, IntriCon Corporation (the "Company") announced that Mark S.
Gorder will be retiring as President and Chief Executive Officer of the Company
effective as of September 30, 2020 and that he will be succeeded as President
and Chief Executive Officer on October 1, 2020 by Scott Longval, the Company's
current Executive Vice President, Chief Operating Officer and Chief Financial
Officer. Mr. Longval will also be appointed to the Board of Directors of the
Company (the "Board") effective as of October 1, 2020. Mr. Longval will retain
his current title and responsibilities, including as Chief Financial Officer,
through September 30, 2020. The Company will commence a search for a new chief
financial officer to replace Mr. Longval.
On June 29, 2020, Mr. Gorder entered into a Transition Agreement with the
Company under which Mr. Gorder will begin transitioning his responsibilities to
Mr. Longval, with the final transition occurring on September 30, 2020. Under
the Transition Agreement, Mr. Gorder will serve as an independent consultant to
the Company during the fourth quarter of 2020 with the title "Special Executive
Advisor" and provide consulting services to the Company's executive management
team pertaining to the final transition and 2021 strategic planning process, for
which he will be paid a consulting fee of $36,950 per month. Mr. Gorder also
will continue as a director of the Company through the balance of his term.
The Transition Agreement also provides that, on the condition that Mr. Gorder
complies with all of his obligations under the Transition Agreement, and
executes (and does not revoke) a general release of claims, the Company will
provide Mr. Gorder the following:
• a one-time severance payment of $443,400;
• reimbursement for Mr. Gorder's medical insurance premiums through December
31, 2021 based on the percentage of his health insurance premium costs
paid by the Company as of the last day of employment;
• a grant of restricted stock units equal to $400,000 divided by the closing
price of IntriCon's common stock on the grant date, which grant will vest
in equal one-third annual installments beginning on the first anniversary
of the grant date; and
• payment of an amount equal to the amount that would have been payable to
Mr. Gorder, if any, under the Company's annual incentive compensation plan
with respect to 2020 in the absence of Mr. Gorder's separation.
In addition, all outstanding stock options held by Mr. Gorder under the
Company's equity incentive plans will continue to be exercisable for the
duration of the respective options' original term. All restricted stock units
held by Gorder under the Company's equity incentive plans will automatically
become free of all restrictions and conditions, less applicable withholdings;
provided however, that in accordance with IRS regulations, the shares underlying
such restricted stock units will not be delivered to Mr. Gorder until the date
that is the six-month anniversary of the date that Mr. Gorder has a separation
from service (as defined in IRS regulations). The automobile and country club
membership benefits under Mr. Gorder's employment agreement will continue
through September 30, 2020.
The Transition Agreement also contains a mutual release of claims provision. Mr.
Gorder has fifteen days in which to revoke the Transition Agreement.
The foregoing description of the Transition Agreement is not complete and is
qualified in its entirety by reference to the complete text of this agreement, a
copy of which is filed as an exhibit to this Form 8-K and is incorporated herein
by reference.
Mr. Longval joined the Company as Corporate Controller in September 2005 and has
served as the Chief Financial Officer since July 2006. Mr. Longval was appointed
as Executive Vice President in January 2019 and Chief Operating Officer in April
2019. Mr. Longval received a Bachelor of Science degree in Accounting from the
University of St. Thomas. Prior to joining the Company, Mr. Longval was
Principal Project Analyst at ADC Telecommunications, Inc., a provider of
innovative network infrastructure products and services, from March 2005 until
September 2005. From May 2002 until March 2005 he was employed by Accellent,
Inc., formerly MedSource Technologies, a provider of outsourcing solutions to
the medical device industry, most recently as Manager of Financial Planning and
Analysis. From September 1998 until April 2002, he was employed by Arthur
Andersen, most recently as experienced audit senior.
In connection with the promotion of Mr. Longval, the Company will amend Mr.
Longval's employment agreement to provide, effective as of October 1, 2020:
• a base annual salary of $375,000;
• annual incentive compensation up to 50% of his base salary;
• a grant of restricted stock units equal to $200,000 divided by the closing
price of IntriCon's common stock on the grant date, which grant will vest
in equal one-third annual installments beginning on the first anniversary
of the grant date; and
• an increase in the severance payable under the agreement in the event of a
termination without cause or a change of control from one year of base
salary to two years of base salary.
Item 9.01 Financial Statements and Exhibits.
Exhibit
Number Description
10.1 Transition Agreement by and between Mark S. Gorder and the Company
dated as of June 29, 2020.
© Edgar Online, source Glimpses
INTRICON CORPORATION 
