Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Appointment of Chief Financial Officer, Jennifer Y. Ryu
On February 3, 2020, Resources Connection, Inc. (the "Company") appointed
Ms. Jennifer Ryu as Executive Vice President, Chief Financial Officer of the
Company. Ms. Ryu has served as the Interim Chief Financial Officer since
August 14, 2019, as previously reported in a Current Report on Form 8-K filed
with the Securities and Exchange Commission on August 8, 2019 (the "Initial Form
8-K"). Biographical and other information regarding Ms. Ryu is included in the
Initial Form 8-K and is incorporated herein by reference.
In connection with her appointment, Ms. Ryu and the Company entered into an
Employment Agreement on February 3, 2020 (the "Ryu Employment Agreement"), which
replaces in its entirety the previous employment agreement between the Company
and Ms. Ryu dated August 14, 2019. The Ryu Employment Agreement provides for an
initial term through February 2, 2023, with the term automatically renewing
annually thereafter for an additional one year term unless either party provides
at least sixty days' written notice of non-renewaland subject to earlier
termination by either party. The Ryu Employment Agreement provides for an annual
base salary of $375,000. The Ryu Employment Agreement also provides that Ms. Ryu
will be entitled to participate in the Company's executive bonus plan, with a
target bonus opportunity for Fiscal 2020 equal to 75% of her base salary with
the actual amount of Ms. Ryu's annual bonus to be determined based on the
achievement of performance criteria approved by the Compensation Committee of
the Board of Directors. Ms. Ryu will be eligible to receive annual equity awards
from the Company in the discretion of the Board of Directors of the Company, to
receive an annual automobile allowance of $15,000 to the extent provided to
other executives of the Company, and to participate in the employee benefit
plans available to other executives of the Company.
Pursuant to the terms of the Ryu Employment Agreement, on February 4, 2020
Ms. Ryu was granted stock options to purchase 15,000 shares of the Company's
common stock and a restricted stock award with respect to 10,000 shares of the
Company's common stock, in each case under the Company's 2014 Performance
Incentive Plan (the "Equity Plan"). The per share exercise price of the options
will equal the closing price (in regular trading) of a share of the Company's
common stock on the Nasdaq Global Select Market on the grant date (or as of the
last trading day prior to the grant date if the grant date is not a trading
day). The stock options have a maximum term of ten years. The awards will vest
as to one-fourth of the shares subject to the award on each of the first four
anniversaries of the grant date, subject to Ms. Ryu's continued employment
through the applicable vesting date. If certain change in control transactions
described in Section 7.2 of the Equity Plan occur when the awards are
outstanding and unvested, the awards will accelerate and become fully vested
upon (or immediately prior to) such change in control.
The Ryu Employment Agreement provides that if Ms. Ryu's employment with the
Company is terminated by the Company due to death or permanent disability,
Ms. Ryu will be entitled to receive (i) accelerated vesting of outstanding and
unvested equity awards, with options remaining exercisable for up to 3 years
following termination of employment and (ii) a pro-rata target bonus, paid when
annual bonuses are normally paid for the year of termination. If Ms. Ryu's
employment with the Company is terminated by the Company without cause
(including a non-renewal of the employment agreement by the Company) or Ms. Ryu
resigns for good reason, Ms. Ryu will be entitled to receive, subject to her
providing a general release of claims in favor of the Company, (i) a lump sum
payment equal to 1.5 times her current base salary and target annual bonus, paid
within 60 days following termination, (ii) accelerated vesting of outstanding
and unvested equity awards, with options remaining exercisable for the remaining
term of the option, and (iii) continued participation in the Company's group
health insurance plans, or a lump sum payment to acquire similar health
coverage, for up to the earlier of 18 months following termination or until she
is covered under a subsequent employer's health plan.
The Ryu Employment Agreement provides that, should benefits payable to Ms. Ryu
trigger excise taxes under Section 4999 of the Internal Revenue Code, Ms. Ryu
will either be entitled to the full amount of her benefits or, if a cut-back in
the benefits would result in greater net (after-tax) benefit to Ms. Ryu, the
benefits will be cut-back to the extent necessary to avoid such excise taxes.
The Ryu Employment Agreement does not provide for a Company tax "gross-up"
payment to make Ms. Ryu whole for any such taxes.
The Ryu Employment Agreement also contains certain restrictive covenants
including a twelve month post-termination non-interference with Company business
relationships and non-solicitation of employees, contractors or customers
covenants. Ms. Ryu is also subject to the Company's standard confidentiality
agreement.
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Employment Agreement with Kate W. Duchene
On February 3, 2020 the Company entered into an Employment Agreement with
Ms. Kate Duchene, the Company's President and Chief Executive Officer (the
"Duchene Employment Agreement"), which replaces in its entirety the previous
employment agreement between the Company and Ms. Duchene dated December 18, 2016
(the "Prior Duchene Employment Agreement"). The Prior Duchene Employment
Agreement was previously described in a Current Report on Form 8-K filed with
the Securities and Exchange Commission on December 21, 2016, which is
incorporated herein by reference. The Duchene Employment Agreement contains the
same terms as the Prior Duchene Employment Agreement, except as described
herein.
The Duchene Employment Agreement provides for an initial term through
February 2, 2023, with the term automatically renewing annually thereafter for
an additional one year term unless either party provides at least sixty days'
written notice of non-renewal and subject to earlier termination by either
party. The Duchene Employment Agreement provides for an annual base salary of
$700,000. The Duchene Employment Agreement also provides that a non-renewal of
the employment agreement by the Company will be treated for purposes of
severance payments as the same as termination by the Company without cause.
The foregoing descriptions of the Ryu Employment Agreement and Duchene
Employment Agreement are respectively qualified in their entirety by reference
to the complete terms and conditions of each employment agreement, which
agreements are attached as Exhibits 10.1 and 10.2, respectively, to this Current
Report on Form 8-K, and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On February 4, 2020, the Company issued a press release announcing the
appointment of Ms. Ryu as the Company's Executive Vice President, Chief
Financial Officer. A copy of the press release is filed as Exhibit 99.1 to this
Current Report on Form 8-K.
Exhibit 99.1 attached hereto shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liabilities of that section and shall not be
incorporated by reference into any filing of the Company under the Securities
Act of 1933, as amended, or the Exchange Act, regardless of any general
incorporation language in such filing, except as shall be expressly set forth by
specific reference in any such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Employment Agreement dated February 3, 2020 between Jennifer
Ryu and the Company
10.2 Employment Agreement dated February 3, 2020 between Kate W.
Duchene and the Company
99.1 Press Release of the Company, dated February 4, 2020
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